The European Parliament has agreed an important policy which would improve the impact of export credit agencies across the EU.
The policy, proposed by the Trade Committee (known as INTA) will, if agreed by the Council of Ministers, force EU countries to report once a year to show that their export credit policies are guided by “environmental and social issues, human rights, sustainable lending and anti-bribery”.
The policy also justifies the Jubilee Debt Campaign’s concerns about export credit debt, the NGO declares - by saying that “export credit-related debt constitutes the largest component of developing-country official debt” and “the largest source of official financing for developing countries”, but charging higher interest rates than the World Bank or IMF usually do.
The new policy, if approved by the Council of Ministers, would force export credit agencies to be more transparent and will bring their activities into line with European environmental targets – including the phasing out of fossil fuel subsidies.
Export credit agencies regularly support fossil fuel projects such as the controversial Baku-Tbilsi-Ceyhan oil pipeline which Amnesty criticised as creating a human ‘rights free corridor’ through the Caucasus, or the Dabhol power station in India which sits dormant as a 'white elephant' project after it produced electricity too expensive for the government to buy.
Export credit agencies will also have to prove that they are charging reasonable insurance premiums, rather than using export credits as a means of giving big subsidies to big business.
The Parliament must now negotiate with the Council of Ministers and European Commission for the policy to become EU law.
Yannick Jadot MEP (Green), who will lead those negotiations, said after the vote: "Even though ECAs are an important tool for supporting European firms, tackling the lack of transparency in this field is an urgent matter. Especially considering that hundreds of millions of Euros flow through them every year, and this in a time of economic crisis. In this period of tight budgets, democratic control over such public expenditures is essential, and I thank my colleagues for supporting my proposals for increased transparency and information."
Nick Dearden of Jubilee Debt Campaign commented: “At a time when Governments across Europe are ignoring environmental or ethical considerations in their drive to increase exports, the European Parliament’s decision injects some much needed accountability back into export support. We urge the British government to heed this policy and ensure the ECGD audits its debts and stops supporting damaging or useless projects.”
Export credit agencies help exporters in their own country by offering insurance or loans to help guarantee sales abroad – often in developing world countries. The main bulk of their support goes to mega projects, especially focusing on fossil fuels, arms sales and aerospace. They are regularly accused by campaigners of complicity in corruption, human rights abuses and environmental destruction.
Ekklesia is affiliated to the Jubilee Debt Campaign, about which more can be gleaned here: http://www.jubileedebtcampaign.org.uk/