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Debates
Wednesday, 11 May 2005 - Strasbourg OJ edition

3. World Bank
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  President. The next item is the Council and Commission statements on the World Bank.

 
  
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  Nicolas Schmit, President-in-Office of the Council. (FR) Mr President, I can indeed confirm, in the context of this Council statement on the World Bank, that the World Bank plays a very significant role at global level in the field of development financing. It is clear that the political and administrative management of the World Bank is thus an extremely important subject. However, as a representative of the Presidency of the Council of the European Union, I am unfortunately not able to set out a position on behalf of the Council, or to report on the work carried out by the Council on this matter.

Indeed, the EU itself  and I would say that this, too, is unfortunate  has no part in the policy-making or operation of the World Bank. It is therefore down to the Member States of the EU that are also members of the bodies of the World Bank to set out their position with regard to the Bank. For this reason, the Council has not taken a position on the matters in question, because it has no authority to do so. None of the bodies of the Council have discussed a strategy for the World Bank, or the coordination of a possible common European position in this regard, or the decision-making procedures within that institution.

I would also like to add that the Member States are working to coordinate their positions in order to have greater weight within the international institutions, including the international financial institutions such as the World Bank; this exercise does not, however, involve the Council as an institution since, as I said, the Community has no competence in this field.

It is also true that Mr Wolfowitz, who has been nominated for the post of President of the World Bank, came to Brussels, where he met the President of the Ecofin Council, Mr Juncker, and the representatives of the other European governors of the Bank. At this purely informal meeting, the future strategy of the World Bank in relation to development financing was indeed discussed with the president nominated by the US Government, as is customary.

I can therefore only regret that the Council has no competence in this matter. Maybe one day we should consider improving coordination between Member States of the EU within these international institutions where they actually represent, thanks to their collective weight, a greater number even than the United States.

 
  
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  Joaquín Almunia, member of the Commission. (ES) Mr President, as Commissioner responsible for relations with international financial institutions, I am grateful for this opportunity to explain to Parliament the Commission’s views on our institution’s relations with the World Bank.

The World Bank and the European Union are the two main world players in the fight against poverty and in the funding of development aid.

This Parliament is well aware that the Union provides around half of the total public aid to the developing countries, and that, furthermore, in the majority of cases, the Union is their main trading partner, which reflects the emphasis placed on solidarity within our international policy.

The main objective of the Community’s development policy is to reduce, and ultimately to eliminate, poverty. This means supporting sustainable economic, social and environmental development, promoting the gradual integration of the developing countries into the world economy and combating inequality.

As the honourable Members are aware, the Union has made a firm commitment to contribute to the achievement of the Millennium Objectives, by means of more and better funding of development aid, greater coherence amongst development policies and, in particular, greater attention to Africa.

In relation to each of these issues, on the proposal of my colleague Mr Michel, the Commission has recently proposed specific actions, which I believe Louis Michel has had the opportunity to debate in this Parliament.

I would like to comment briefly on the first two issues: levels of funding and the need to improve coherence amongst our development policies.

In relation to funding, at the Monterey Summit, the Union announced its commitment to increasing official development aid from the level we were at in 2002, 0.33% of GDP, to 0.39% in 2006, as a first step towards compliance with the objective of 0.7% in 2015.

Last month the Commission proposed two additional and interrelated objectives for 2010: an intermediate objective, for the whole of the Union, of 0.56% of GDP in development aid, and an individual objective in official development aid for each of the Member States, which would be a minimum of 0.51% for the Member States which belonged to the Union before enlargement and 0.17% in 2010 for the new Member States.

Nevertheless, however important it may be to make this effort, it is not enough. Apart from aid, the policies of the developed countries have an enormous influence on the possibility of the developing countries achieving the Millennium Objectives and, in this regard, the Commission is stressing the importance of the coherence of development policies and for the first time is making commitments in this regard in these communications.

With regard to relations with the World Bank, I would like to refer to two issues: operational cooperation between the Commission and the Bank, and the European Union's representation in the governing of the World Bank.

Relations between the Commission and the World Bank are long-standing. We share the same agenda in terms of reducing poverty and, of course, we share the same Millennium Objectives. The World Bank is working to achieve these objectives, by means of its principal operational lines and by assessing the progress made towards achieving these objectives within the context of the Global Monitoring Report.

The Commission and the Bank cooperate closely in the provision of aid, by means of the Trust Fund Agreement, signed in 2001 and amended in 2003. This cooperation led to the Union's participation in various trust funds, with a total contribution of more than EUR 1 500 million since 2000.

Other examples include the funds for combating AIDS and specific funds, such as the Heavily Indebted Poor Countries Initiative (HIPC).

Furthermore, both the Commission and the Bank increasingly work on the basis of national poverty reduction strategies defined by the developing countries themselves.

In addition to these global objectives, cooperation with the World Bank also focuses on certain priority geographical areas, with regard to which we carry out joint analyses, hold joint dialogues on policies and work to coordinate financial programming for the countries closest to the Union’s borders. We are not, therefore, just talking about coordinated action between the World Bank and the European institutions in countries that already belong to the Union, but also, of course, the candidate countries and the neighbourhood policy countries, such as the Western Balkans, North Africa and the Middle East, and countries belonging to the Community of Independent States.

With regard to these countries, the Union’s cooperation, by means of the Commission and the World Bank, is aimed at ensuring that the policies applied are complementary and contribute to the incorporation of the acquis communautaire, and places particular emphasis on institutional development, the environment and its infrastructures, economic reform and development of the private sector.

To this end, over the last five years, the Commission and, sometimes, the European Investment Bank have signed three memorandums of understanding with the World Bank.

These memorandums serve as a practical framework for enhanced cooperation in terms of economic dialogue and technical and financial assistance. They cover the coordination of our activities in the fields covered by the Union’s neighbourhood policy and over the coming months the memorandum of understanding is going to be extended to the new Member States and the candidate countries, with a view to including the Western Balkans.

I would like, finally, to comment on the Union’s representation in the governing bodies of the World Bank.

184 States currently belong to the bank, including the 25 Member States of the European Union. In the Bank, the percentage of votes for these Member States of the Union is 28%, whilst the United States have 16%.

Nevertheless, that 28% does not in practice reflect the Union’s real weight. The European Union’s contribution to funding granted is even greater than that 28%. In this regard, the example provided by the latest review of the International Development Association (IDA) is revealing. On this occasion, there has been a spectacular change in the contributions of the donors, with the European share increasing from 48 to 60%, while that of the United States has dropped to 13.8%, the lowest in the history of the organisation.

Despite these figures demonstrating the Union’s participation, both in the Bank's capital and in its funding, we are not taking full advantage of that weight as a result of the lack of unified Union representation in the Bank's governing bodies. And thus, despite the fact that, numerically, the Member States of the Union dominate the Bank’s governing council, overall they have less influence than the United States.

The Commission currently participates solely as an observer in the meetings of the Bank’s Development Committee, the main decision-making body of that institution. This situation is the same as the situation in the International Monetary and Financial Committee of the International Monetary Fund and is in clear contrast with the European Union’s influence on development cooperation compared to its effective influence in the World Bank or in the life of the international monetary system, by means of our single currency, in the case of the International Monetary Fund.

The Commission has been insisting that, if the Union wishes to put an end to the disparity between its influence and its contributions and aspires to a greater presence on the international stage, it must speak with a single voice. If it is able to present a single European position, the Union will increase its visibility and its influence. In this regard, it should be noted that there has been a little progress in the Union’s coordination with the Bank’s governing bodies.

For example, since last year, the executive directors in the World Bank from the European Union have been holding annual meetings with Members of this Parliament, with the Commission and with representatives of non-governmental organisations.

The Union’s executive directors in the World Bank have agreed to meet on a weekly basis to exchange opinions and a Commission official from our delegation in Washington participates regularly in these meetings.

The Commission is working to improve the coordination of the European executive directors in Washington, but the ultimate objective must be unified representation of the Union within the governing bodies of the World Bank. Before taking that decision, of course, it will be necessary carefully to examine its legal and budgetary implications, but this must not prevent us from seriously analysing how to make progress towards this objective.

In conclusion, our cooperation with the World Bank is long-standing and intense, particularly in terms of supporting the developing countries. The Commission wishes to maintain and enhance these excellent working relations and to improve coordination, both with the World Bank at operational level and amongst the representatives of the Member States in the Bank's governing bodies. In this way, the Union would be speaking with a single voice and would have the influence it deserves within the Bank.

 
  
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  Anders Wijkman, on behalf of the PPE-DE Group. (SV) Mr President, I wish to thank Mr Schmit and Mr Almunia for their contributions. There is a lot that can be said about the World Bank, its governance and, in particular, how its managers are appointed. The recent election of Mr Wolfowitz shows that qualifications for the specific task have played a smaller role than political merits. It shows that the appointment of senior managers in the international system still leaves a lot to be desired.

I have little time, however, so I shall focus specifically on relations between the EU and the World Bank. Both Mr Schmit and Mr Almunia indicate the current weakness that lies in our not acting in unison and not speaking with one voice. In the case of Parliament, we recently had a meeting with the European directors of the World Bank, and they were completely united in calling emphatically for a higher degree of unified action from the EU on development issues, both across the board and specifically when it came to work in the World Bank. About a month ago, we also had a meeting with Jeffrey Sachs in the Committee on Development, and he asked why, given that the flow of money by way of aid from the EU is hugely greater than that from the rest of the world, the EU does not take more concerted action. In that way, he said, our work would be more effective and produce better results, and we would also have greater influence in every dimension of this important context.

The fact is that both Mr Schmit and Mr Almunia emphasised in their contributions that something is missing at present. How are we to take more concerted and unified action in foreign policy if we continue to act in such a divided way in these international institutions? It is also typical that, in the talks now being conducted on the future composition of the Security Council, we have no discussion at all about whether the EU, as a unified body, should have a place on the Security Council and about the fact that what still counts is, instead, the Member States acting on a national basis.

I can only emphasise, on the basis of where I stand, that we must bring about change at this level. We need to cooperate in a more concerted manner and we must harmonise our efforts in a quite different way in order genuinely to obtain the results we want from action taken by the EU and to be able to accept greater responsibility in the global arena.

 
  
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  Poul Nyrup Rasmussen, on behalf of the PSE Group. (DA) Mr President, Mr Schmit and Mr Almunia, may I thank those last two gentlemen for their contributions today concerning the World Bank. I really feel that they focused upon what is fundamentally needed. There is no doubt that, five years after we signed the Millennium Declaration in 2000 concerning the developing countries’ basic needs up until 2015 – I was myself one of the signatories – we now have to note that matters have not moved in the right direction. Instead, they have unfortunately moved in the wrong direction in most areas.

Nor is there any doubt that, over the last 15 years, 54 countries have become poorer and one billion people now live on less than two euros per day. The World Bank does not operate as well as it could. It has a series of important reforms under way, but we are still not tackling a number of problems. I completely support Mr Almunia’s emphasis on the fact that Europe can speak with one voice, and I would propose four tasks for consideration that I believe are urgent.

The first task proceeds from the real need we now have in Europe to find a way of taking concerted action in the World Bank. If we do so, we shall have 27.98% of the votes, compared with the United States with 16.39%. At present, the European country with the most substantial share of the votes after the United States is Germany, with 4.49%. I am not talking about a new conflict of interests; I am talking about a far better balance in the World Bank and about our needing, as the second task, to ask for a reform of its lending rules and conditions and, indeed, to insist that this takes place. We must ensure coordination between the World Bank, the International Monetary Fund and UN aid to the developing countries. In that way, our efforts will be along the same lines, rather than overlap.

The third task relates to the need we have for reform of the Washington consensus. We need now really to stop making the same demands of poor countries as we make of rich ones and to help construct healthy and strong states in the developing countries which can then embrace the right to share the ownership of development policy. Our fourth and final task, Mr President, is genuinely to take the ILO’s report on world poverty seriously, something that the World Bank too should do. ‘Decent jobs for all’ is the crucial tool for eradicating poverty.

May I conclude by concurring with Mr Almunia and Mr Schmit in saying how important I believe it is for Europe now also to assume the genuine responsibility stemming from the fact that we are the world’s largest organisation providing aid to developing countries. We should share responsibility for ensuring that the World Bank too acts accordingly.

 
  
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  Johan Van Hecke, on behalf of the ALDE Group. (NL) Mr President, when the World Bank was set up in 1944, the seven richest countries, the G7, produced the lion’s share of all goods in the world by far; nowadays, they produce barely half of them. At the time of the World Bank’s formation, the United States was the biggest lender of money; today, it is the biggest debtor. Sixty years ago, the developing countries were still incapable of standing up for themselves, today, their influence in multilateral negotiations, for example those in the context of the World Trade Organisation, can no longer be ignored.

All this indicates that the World Bank is in urgent need ofdrastic reforms. As long as the developing countries have no real say in its policy and decision-making, the World Bank will continue to be perceived as a control instrument in the hands of the so-called rich, instead of an international institution that is geared towards stability and development, in a spirit of mutual respect and solid partnership.

The World Bank now has an external relations department, which employs more than 300 people, and which is described by the Bank itself as one of the most important departments for brushing up its image, but the question remains whether this cannot be done in a different way, namely by involving the developing countries in its operations more effectively, by finally making decision-making more transparent and by better monitoring spending. In short, I am among those who believe that the World Bank is in urgent need of ‘resourcing’ – not financially, but internally. Indeed, within this international organisation, which is considered one of the biggest and most authoritative, time appears to have stood still for more than 50 years in terms of structure, operation and mentality.

 
  
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  Monica Frassoni, on behalf of the Verts/ALE Group. (IT) Mr President, ladies and gentlemen, I am most grateful to the members of the other groups who have given their support to our proposal to debate the issue of the World Bank, even though I was perfectly aware, like the majority of us, that the Council could not say anything very different from what Mr Schmit has declared this morning. We must, however, be aware of the fact that an unsatisfactory situation can and must be changed, moreover because this seems to me to be a sector in which political will can assist us.

We do not have to resort to major articles of the Treaty in order to ensure that the Council and the Commission, together with Parliament – and that is absolutely crucial – can work to improve the question of European coordination, or at least to put it on the agenda. European coordination should not, however, be confined solely to the perfectly worthwhile work of technical and financial cooperation, but it must also be focused on the policies of the World Bank – policies precisely on which we have no say at all – on appointment procedures and on the criteria for granting funding. I believe that those are the three points on which the actions of the European Parliament should be better focused: we can do so if we want to.

I believe, Mr President-in-Office – and you can correct me if you should choose to respond – that this is not an issue of competence, but of political will: if the Council so chooses, it can act, as can the Commission, and the same holds for Parliament.

With regard to the appointments procedure, we very well know that directives were issued between 2000 and 2001 to make it more transparent and acceptable. Those directives have been ignored and that has a powerful political significance: once again it is not an issue of a procedural or institutional nature. The United States turned down the first candidate proposed by the Europeans to head the International Monetary Fund; the countries of Europe did not do the same when Mr Wolfowitz was presented as the candidate to direct the World Bank. They could have done so. Two telephone calls were enough to convince a couple of European prime ministers or Heads of Government, and the executive directors were completely bypassed: I believe that that would have been perfectly preventable if we had so desired.

As regards the quality of World Bank policies, today we have no particular guarantees that certain small breakthroughs initiated by Mr Wolfersohn will be continued: I am referring to governance and to the issue of corruption. I believe that we should also seek to make an impression in this area. There is a series of extremely controversial projects, such as the large dam on the Nam Theun river in Laos or the mining project in Guatemala, that stir up opposition right across the board, and yet our executive directors have given them the green light. If this Parliament and public opinion had been aware of these issues, they would in all likelihood have acted differently. In addition to claims of powerlessness, I would also like to hear some evidence of a willingness to act.

 
  
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  Luisa Morgantini, on behalf of the GUE/NGL Group. (IT) Mr President, ladies and gentlemen, I thank Mrs Frassoni for having clarified in such a direct manner the issues brought to the table.

I believe that the appointment of Mr Wolfowitz as head of the World Bank has once again highlighted the lack of democracy and transparency that characterises the process of selecting and appointing the head of the world’s most important financial institution for development. It has also put the Committee on Development of this Parliament under the spotlight. We would like to think that the President of the World Bank had a positive approach to resolving intercultural conflicts, in addition to an unquestionable commitment in support of multilateralism, together, of course, with a personal involvement in ensuring social equality and in the fight against poverty.

Aside from passing judgment on the person, however, who is well-known in any case for being one of the most effective proponents of the doctrine of preventative war, not to mention exporting democracy through weapons – one never knows, even Saint Paul converted on the road to Damascus – it would seem that the World Bank has not evolved much from the framework established at Bretton Woods, now more than 60 years ago. That is also the case as regards the system of votes and seats, which needs to be reviewed, partly in response to requests from countries of the South and movements that have been calling in recent years for a different South and for involvement.

The European Union has pledged to guarantee and to facilitate a greater level of co-partnership from developing countries in global economic decision-making processes, including international financial institutions. Leaving aside those agreements and the commitments undertaken by the EU – in Monterey, Barcelona and Johannesburg – however, it would be correct and logical to ensure good governance in the running of an institution that requires co-partnership as a foremost condition for gaining access to financing.

The lack of compliance with the criteria of democracy and transparency undermines the foundations, the legitimacy and the credibility of international institutions, in a world in which we feel the need for strong and legitimate international institutions that promote involvement: one only has to read Aminata Toure’s book, which uncovers her tragic experience of the conduct of the World Bank in Mali.

The European Union can play a fundamental role in ensuring this legitimacy; indeed, the European Union must carry out this very role, but in order to do so, it must speak with one voice: greater coordination among the European directors must be developed, given that Europe holds 30% of the votes on the Boards of the World Bank and of the International Monetary Fund.

The European Union, let us repeat, is the largest donor in the world, and yet it often forgets to supplement the donations with effective political action. A significant role can be carried out by Members of the European Parliament, and in a meeting held in New York that has already happened. Clear responses are needed: democratic reform of the processes must, however, also aim at overturning the asymmetry between the economies of North and South.

I believe that we must bring about development; in contrast, the policies of the World Bank have very often had devastating effects on populations. This refers in particular to privatisation and basic needs, given that it would appear futile, as Mr Watson said, for the markets of developing countries to be full of goods that the people cannot buy because they have no jobs or money with which to buy them.

 
  
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  John Whittaker, on behalf of the IND/DEM Group. Mr President, in the European Union, we are very good at sanctimonious rhetoric about the need for poverty reduction in poor countries. But whatever the appearances, this is not what today’s discussion is about. As Mr Almunia has made clear, it is about influence.

I will not comment on Mr Wolfowitz’s suitability to lead the World Bank, but the European Union’s initial hostility to him has softened. The EU needs support for Pascal Leumi to head up the World Trade Organization and for its candidate – perhaps Baroness Amos? – to lead the United Nations Development Programme. Hence the comment of Action Aid that EU support for Mr Wolfowitz is a stitch-up, and similar remarks from other NGOs.

Whilst I will not diminish the value to poor nations of assistance from the World Bank and the European Union, fair trading conditions would be of far greater value to them than any amount of aid or debt relief. Trade, rather than hand-outs, allows poor nations to help themselves, as the Indonesians were pleading after the tsunami.

Unfortunately, the EU seems to excel in poverty creation in pursuit of its own agenda: for example, paying cash to Mauritania, Angola and Mozambique for the right to fish out their coastal waters and impoverish their fishermen; or economic partnership agreements under which the European Union tries to buy poor nations’ acquiescence to its protectionist policies.

No doubt the rhetoric will continue. The reality is that self-interest rather than philanthropy drives the EU’s actions, and this self-interest is best served by the EU having its own people in the top jobs.

 
  
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  Hans-Peter Martin (NI). (DE) Mr President, if I may, I should like to use the short time available to me to make a suggestion.

On 18 May, the Commission will turn its attention to the European Transparency Initiative. A great variety of ideas are on the table, one of which is to redesign the EU’s websites. Might it not be possible for the Council and the Commission, and by all means Parliament too, to take the very practical step of launching an improved website setting out in very clear terms what the World Bank actually does and what progress we Europeans have achieved so far within this institution, as well as the representatives we have within the Bank, the specific projects that are involved and the opportunities that are available to us to make our voice heard?

Why am I saying all this? Having followed the debate on screen, I was forced to draw the regrettable conclusion that nearly everything that was said had already been said 20 years ago. In my opinion, it will only be possible to bring about the necessary reforms – and the majority of Members believe that the World Bank urgently needs them – if transparent procedures are used to bring matters out into the open.

 
  
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  Othmar Karas (PPE-DE). (DE) Mr President, Commissioner, ladies and gentlemen, what has been said so far in this debate has proved once again quite clearly that we are a big payer in global terms, but not yet a big player in political terms. It is not enough for us to merely offer explanations as to why this is so, and to express our regret; we are called upon to take action, and we must do everything in our power to ensure that this happens without delay, in order to close the gap between what we are and what we would like to be. Unless this happens, we will be unable to honour our commitments, both within the EU and outside of it.

Both the Council report and the Commission report were not so much reports on the World Bank as a thorough analysis of our shortcomings. The two reports make it quite clear that the problem does not lie with the World Bank, but with us. As the President-in-Office of the Council has already said, our problem is that it is the Member States that bear responsibility for this issue, rather than the Council, even though one could be forgiven for thinking that the two are one and the same. In their capacity as Council members, the Member States should do everything in their power to ensure that the Council initiates measures to remedy this shortcoming.

A comment was made to the effect that we should start this process at some point in the future. Rather than leaving it until some point in the future, however, we must start it now, and without delay. The Constitution provides us with an opportunity to do so, as it grants legal status to the European Union. We must take advantage of this status in order to address the failings of our external representation.

As I see it, the policies we pursue within the IMF, the World Bank, the WTO, the UN and the EIB are interconnected. All of our representatives in these institutions must speak with one voice and be coordinated by one person if we are to be able to perform the duties incumbent upon us throughout the world. The increasing influence of globalisation on our actions means that there is a growing need for a global order, for a social and economic order and for an order of principles. We will be unable to play our role properly within these organisations if we do not start by establishing an order of this kind in the EU. It is up to us to act, not the World Bank.

 
  
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  Margrietus van den Berg (PSE). (NL) Mr President, Mr Wolfowitz, in a past life, adopted a rather unilateral stance and was known to us as a hardliner; he has now become the Chairman of the World Bank, a multilateral development institute. This is surely – to put it in money terms – a remarkable example of laundering. This has also been embarrassing for Europe; as someone said a moment ago, there are new procedures in which we have a say, but all it took was a few phone calls from the US to get him in the chair. We had not agreed beforehand on a joint candidate, unlike in the case of Mr Lami for the WTO. As far as the World Bank was concerned, we came too late and were not united. I think that that was our failing, and a report by the Council and the Commission has been honest enough to say so.

Needless to say, it is not just about a joint candidate, but also about policy. Everyone knows that, where Washington consensus is concerned, the international, multilateral financial institutions have lines and priorities that are often at odds with development and poverty policy which we in Europe would like to adopt at international level. It is not necessarily about having it all one way or the other. What we need is a balance. In order to strike this balance and to be able to place social objectives, poverty reduction and millennium objectives on the centre stage in the World Bank, it is necessary to speak with one voice. This requires joint action. I agree with what was said a moment ago: the new Constitution may give us more scope and a duty, in a way, to act in those institutions as Europe and to speak with one voice.

It is quite something: we provide 60% of the loans under favourable conditions and have a much greater share of the votes, but are, to all intents and purposes, absent at the same time. We would never tolerate this in the area of trade. I think that this is at the heart of the matter. We also need coherence. In Africa, for example, the World Bank has been involved in the priority initiative on education. The Commission does not want to have any part in this, though, because the national strategy documents for that area provide for roads and infrastructure and not for education. We are therefore not delivering, while in this House, we are crying out for coherent, joint action.

There is therefore a problem on both sides. Can the Council and Commission not reconsider whether, on the basis of the new Constitution, an initiative could be taken, at least in political-economic terms, on behalf of the World Bank? We must also occupy a stronger position than is currently the case in terms of the way we cooperate. The position at the moment is very depressing indeed. Neither the Council nor the Commission is prepared to occupy it. After all, both have spoken very convincingly and sounded pessimistic at the same time. Let us head for the future allegre.

 
  
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  Ignasi Guardans Cambó (ALDE). (ES) Mr President, it is clear that the World Bank is an effective instrument, and could be even more so, and I do not believe that the new leadership is the problem. I have no particular fear that the new leadership of the World Bank may redirect energies, which to date have been directed towards other areas, in order to make the World Bank operate better.

The problem is with us, the hypocrisy of European discourse, in which we spend our time explaining to our citizens that Europe wants to carry influence in the world, how we want to contribute to peace in the world. And the governments say this to their own voters and then do not make the least effort to turn these words and promises into real actions.

The European Union as such carries no weight in the World Bank. We do not need a new Constitution for that; it is a problem of political will and coherence. Commissioner Almunia has described this perfectly. We have 25 Member States that do not talk to each other in the World Bank, and that is something we must condemn here. It is very easy to protest against the appointment of Mr Wolfowitz, and perhaps we should do so, but it should be much easier for all of us to condemn our governments’ inability to coordinate themselves in relation to policies, appointments and criteria for granting funding.

 
  
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  Frithjof Schmidt (Verts/ALE). (DE) Mr President, ladies and gentlemen, the most pressing problem we face with regard to the World Bank’s policies is its policy on structural adjustment. The World Bank has supported structural adjustment programmes for many decades, and yet these have often had grotesque results, for example in the case of the privatisation of services.

A good example of this is water supplies, in that, even though these have been privatised and infrastructure put in place, the price of water has risen so rapidly that the poorest groups in society can no longer afford it. Another example is trade policy, as making the granting of loans conditional upon forced liberalisation and the opening up of markets means that the negotiating position of developing countries in the WTO rounds is weakened. All this stands in stark contrast to the EU’s development policy goals, which, for example, give water supplies a key role in the fight against poverty and strengthen the negotiating capacity of developing countries in WTO rounds. This is therefore a key line of attack to take in changing the World Bank’s policies.

The reform that is now in its initial stages will change absolutely nothing. What is termed the new selection policy for loans, which is meant to be about to be introduced, is essentially an admission of defeat for over 30 years of World Bank policies; it means, in short, that those countries that have participated in the World Bank’s structural adjustment programmes over recent years or decades without having achieved good results and without having gained anything will now get money to tackle their most urgent social problems. Those countries that did not participate properly will receive less money. This distinction between good performers and bad performers is extremely questionable, and in my opinion the Commission and the Council have a duty to insist that it is made according to clear, transparent and easy-to-understand criteria, if nothing else. I believe that they also have a duty to urge the World Bank to make far-reaching changes to its poverty reduction strategy, in the framework of UN reform and the Millennium Development Goals.

 
  
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  Proinsias De Rossa (PSE). Mr President, I have to say that I am shocked by the Council statement here today that not a single body of the Council has made any effort whatsoever to reach a common position in relation to our stance in the World Bank, or indeed to use the clout we clearly have financially and in voting terms on the World Bank; despite the fact that every Head of State recently signed up solemnly to the European Constitution, which declares that we want to end world poverty, and despite the fact that each Member State has signed up to the Millennium Development Goals.

We still have states that welsh on their commitments to reach the development aid target of 0.7% of GDP, which has been in place for decades. My own Member State solemnly declared last year at the United Nations General Assembly that it would reach the 0.7% of GDP by the year 2010. This year, it has announced that it will not reach that figure, not because we do not have the money, but because the Government wants to spend the money on winning the next election!

It is clear that the governments of the Member States of the European Union are more interested in trade than they are in eliminating poverty. They are more interested in securing their position in the World Trade Organization than they are in securing the position in the World Bank to pursue the objectives of the Union. Could I ask that this House move from making declarations to establishing an ad hoc committee so that we can prepare a common position for the European Union and the World Bank and then drive the Council and the Commission to adopt Parliament’s position on this issue?

 
  
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  Nicolas Schmit, President-in-Office of the Council. (FR) Mr President, I would like to start by thanking the honourable Members for this extremely interesting debate and for the very useful messages that they have given not only to the Council but also to the Commission. I would like to single out two or three issues, and I will start with the influence of the EU in the financial institutions, and particularly within the World Bank. Let me speak for a moment on behalf of the Presidency and not as a representative of the Council.

It is true that, if we were share-holders in a private company, we would be managing our share in that company’s capital very badly. However, as you know, it is a bit more complicated than that, and we are not in that situation. We are in a different situation, which is political in nature. Nevertheless, I must say that the message that the European Union must improve coordination of its positions within those organisations, and particularly within the World Bank, is based on absolute necessity since, as several of you have said, we are far from exercising our full influence, not only in financial terms, but also politically.

On that subject, I would like to point out that there may be an article in the Treaty that we should take a second look at and possibly take advantage of to follow up this morning’s debate. I am referring to Article 99 of the Treaty – which is also included in the draft Constitution – and which provides that Member States may, on the basis of a proposal, improve coordination of their positions within financial institutions and international financial conferences. I therefore think that the question of representation of the EU in international circles – and especially in international financial circles – remains to be answered. I do not need to return to the difficulties associated with it.

The second issue that you raised, which is perhaps linked somewhat to the first, is the reform of the international financial institutions, and in particular the World Bank. I think that, on this point, the European Union’s role is extremely important. We do need – and this was, in part, the aim of the informal meeting with Mr Wolfowitz – to urge the new President of the World Bank to pursue reform, not only of the operation of the World Bank, but also of its policies. I think that, here too, the European Union could have an even greater role if it spoke with one voice. This brings us back somewhat to the issue of the influence of the EU in the international institutions. It is certain that, within those institutions, it is necessary to take better account of new balances of power in the world, and to integrate better a number of new international players, new economic powers, without forgetting the developing countries.

The final point relates to development aid policy. The Commissioner also provided a certain amount of information in that regard. The European Union is the biggest donor, giving more than 50% of development aid. I must say that we have started to look into new forms of development aid financing. The most recent Ecofin Council worked on these methods of financing. You are all aware of the idea that was put forward of creating certain taxes specifically in order to meet, or increase, levels of development aid, and I can tell you that, during its informal meeting that will take place on 13 and 14 May in Luxembourg, Ecofin expects to return to these new methods of financing development aid, particularly with a view to ensuring compliance with the objectives of the Millennium Summit which will be held in September.

 
  
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  Joaquín Almunia, member of the Commission. (ES) Mr President, I would firstly like to express my agreement with all the speeches that have referred to the need for closer coordination of the Member States of the European Union in the activities, in the decision-making, in the orientation of the policies and in the strategy of the World Bank.

By means of the instruments available to it, the Commission tries to influence and guide the policies of the World Bank in line with our objectives in terms of development policy and official development aid. In my initial speech I spoke about those memorandums of understanding, those trust funds, by means of which we take action, combining the resources of the World Bank with the budgetary resources of the European Union in a whole series of activities and regions of the world, whenever we consider that those actions are in line with the objectives set by the European Union and with our priorities in the field of development aid and our policies for supporting development in the poorest countries of the world.

Secondly, I will repeat what I said in my initial speech and something that has also been taken up by many of you: the need to make progress towards creating a single voice for the European Union in the World Bank and in other international institutions.

Some of you have said that the entry into force of the Constitution will act as a lever for moving towards that objective, and it is true that the entry into force of the Constitution, the single personality for the Union and the political impetus represented by the implementation of the Constitution must help us to progress towards that goal. But it is also the case, as the Presidency-in-Office of the Council has just pointed out, that, under the current Treaty, with the provisions currently in force, the Union should already be speaking with one voice in many bodies, including the World Bank and the International Monetary Fund, at least in relation to the Eurozone.

There is, however, another element that will help us. I do not know if it is in line with the will of all the Member States, but I do believe that it is in line with the collective will of the Union, of this House, of the Commission and of the Council. Europe wants to be a global player, as Mr Karas has said, but there are certain countries which are going to be global players and which are demanding reforms within the governing bodies of the way in which the different countries and regions of the world are represented in the international financial institutions and, in particular, in the World Bank. Faced with this pressure, the European Union cannot respond in a divided manner, it must respond in a united fashion, moving towards that single voice.

I would like to make a comment on the appointment of the new President of the World Bank. As you know, the European Commission does not participate in any way in that procedure, but Mr Wolfowitz will become President of the World Bank on 1 June. From that date, we want the World Bank to continue working on the positive aspects that have characterised the presidency of Mr James D. Wolfensohn over the last 10 years. And on the two occasions I have been able, as a member of the Commission, to speak personally with Mr Wolfowitz over recent weeks, that is what I have said to him: from 1 June, the European Commission and the whole of the Union wants the World Bank to continue in the positive direction taken during the years of the Mr Wolfensohn’s leadership. And I must tell you that, so far, Mr Wolfowitz’s response indicates that he is committed to continuing to work on these positive aspects. I hope that, after 1 June, we will see that that is the case.

 
  
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  President. That concludes the debate on this item.

 
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