The rapidly changing dynamics of global economic governance, coupled with rising geopolitical tensions, significantly impact Europe’s trade, investment and development landscape. San Bilal and Andreas Klasen argue that to fully realise the ambitions of its Global Gateway strategy, the EU should improve the coordination and complementarity of development and export finance.
Summary
The rapidly changing dynamics of global economic governance, coupled with rising geopolitical tensions, significantly impact Europe’s trade, investment and development landscape. This calls for greater coordination and complementarity of EU external financial tools, in particular export finance and development finance, to contribute to the EU’s ambitions to mobilise public and private sustainable investments. This is in line with the EU Trade Policy Review, the EU Global Gateway strategy, the announced EU clean trade and investment partnerships, the new EU foreign economic policy and statecraft, and the EU competitiveness agenda.
To fully realise the ambitions of the Global Gateway strategy and effectively move from start-up to scale-up, the EU must prioritise the creation of a comprehensive, coherent and competitive financial offer. The EU’s approach needs to shift from isolated, ad-hoc coordination actions to a more systematic, long-term strategy that reflects whole-of-government models. In particular, five critical actions are required to harness the potential of Europe’s export credit agencies and development financiers in EU sustainable investment endeavours. These include (1) high-level project support and EU member state alignment, (2) setting up a coordination entity for implementation and operational support, (3) more targeted EU financing mechanisms to improve the effectiveness of the EU guarantee system and promote project-based guarantees, (4) an active role for EU delegations, the European Commission and EU member states in project pipeline creation, and (5) strengthening communication and implementing measurement.
About the Authors
Dr San Bilal is the director of ECDPM.