The European Investment Bank (EIB) is one of the EU’s two financial institutions, the other being the European Bank of Reconstruction and Development, which has its HQ in London and has its own corruption scandal, as reported in Part One. The EIB was established as the EUs long term investment vehicle, and has its HQ in Luxembourg. It is owned by all 28 member-states and can be said to be a policy-driven bank; in other words its lending facilities have to be in concert with the policies of the EU. The Bank has well over €230 billion in subscribed capital, i.e. it piggy-backs the aggregated credit ratings of the member states to borrow money in the markets to finance EU projects. Given that the UK is one of its biggest owners then, it comes as a surprise that one of its most senior executives is embroiled in a, yes you guessed it, corruption scandal.
Last month the EIB’s Vice President Magdalena Alvarez was questioned by an investigating judge relating to a €136 plus million fraud in Andalusia dating from 2001. It is alleged that proceeds from the fund were used to pay for fictitious retirements and fraudulent severance packages, according to the Spanish daily El Pais. The fund was set up to help companies in difficulty, which makes the allegations that much more barbed in a country that has been hammered by economic incompetence. Alvarez was finance minister for the semi-autonomous region from 1994 until 2004, and then infrastructure minister in Prime Minister Jose Luis Rodriguez Zapatero’s Socialist government from 2004 to 2009. She denies all wrongdoing.
Again, another financial scandal involving the EU and not covered by the UK media.