Banking on Europe: New Indicators of European-Level Borrowing Between, 1955-2023

This three-year project, which was funded by the UK Economic and Social Research Council, and the Luxembourg National Research Fund, brought together a team of researchers in the UK and Luxembourg between 2022 and 2025. The project's aim was to generate new knowledge about the evolution and accountability of pan-European borrowers. Institutions with the authority to raise funds on financial markets to provide grants, loans or guarantees were part of the European Communities' early efforts in the 1950s to support the coal and steel sectors and regional development. Such institutions formed key elements of European responses to the economic crises of the 1970s, the reuniting of Europe in the 1990s and the euro crisis in the 2010s, and they were pivotal to the EU's response to COVID-19. The Luxembourg-based European Investment Bank, which has become the world's largest multilateral lender, provided EUR 25 billion in guarantees for European businesses hit by the pandemic. This is in addition to the EUR 750 billion that the European Commission was authorised to borrow to help with the economic costs of COVID-19. As a result of these and other initiatives, the EU started to borrow on the scale of a large state. This data set includes new indicators of European-level borrowing between 1955 and 2023.

This three-year project will bring together a team of four researchers in the UK and Luxembourg with the aim of generating new knowledge among academics and policymakers about the evolution and accountability of pan-European public financial institutions. Institutions with the authority to raise funds on financial markets to provide grants, loans or guarantees were part of the European Communities' early efforts in the 1950s to support the coal and steel sectors and regional development. Such institutions formed key elements of European responses to the economic crises of the 1970s, the reuniting of Europe in the 1990s and the euro crisis in the 2010s, and they are now pivotal to the EU's response to COVID-19. The Luxembourg-based European Investment Bank, now the world's largest multilateral lender, has provided EUR 25 billion in guarantees for European businesses hit by the pandemic. This is in addition to the EUR 750 billion that the European Commission plans to borrow to help with the economic costs of COVID-19. As a result of these and other initiatives, the EU will soon be borrowing on the scale of a large state. As pan-European public financial institutions grow in importance, they face calls for greater accountability to governments, parliaments and NGOs. And yet, there is limited political science research on either the evolution or accountability of these bodies. Existing studies typically look at pan-European public financial institutions individually and ahistorically. The funding requested will support a Principal Investigator and Postdoctoral Research Associate in London and a Co-Investigator and Postdoctoral Research Associate in Luxembourg to undertake the first comparative study of pan-European public financial institutions, drawing out the institutional and historical interconnections between a range of such bodies created since 1950. We will refine and develop a novel theoretical account of pan-European public financial institutions based on new intergovernmentalism, which we will test against other contemporary theories of European integration through archival research, elite interviews, process tracing, meta-synthesis and a mixed method study of accountability practices. Our findings will generate new knowledge on: (1) the evolution and accountability of pan-European public financial institutions since 1950; (2) who is driving these developments and what this means for accountability; and (3) how accountable these bodies are in practice and how their accountability to governments, parliaments and NGOs can be strengthened. Through journal articles, a monograph and conference presentations, this project will shape debates about public financial institutions among scholars of European integration and International Political Economy. Through working papers, policy briefs and workshops, the project will produce knowledge exchange with practitioners who work in and on pan-European public financial institutions. Our findings will encourage governments, parliaments, NGOs and pan-European public financial institutions themselves to explore new and stronger accountability practices. This project is timely given public debates over how temporary responses to COVID-19 might permanently change the EU. It is relevant for understanding how Brexit will impact upon the UK's continued membership of the London-based European Bank for Reconstruction and Development and the British government's search for a new relationship with the European Investment Bank. It is salient for debates about how a new generation of international public financial institutions, such as the Asian Infrastructure Investment Bank, can learn from Europe. The project offers considerable value-added by fostering international collaboration on a topic of shared importance for the UK and Luxembourg, which are home to important pan-European public financial institutions.