Copyright : EIB
(15 September 2023) Two new reports highlight the role of public banking in delivering quality public services. The new Public Services International (PSI) report titled 'The potential of public banks to fund local quality public services' and the Counter Balance report 'EIB and EU public finance must go to essential public services' highlight the need for financial institutions to invest in quality public services for all.
The COVID-19 pandemic has underscored the indispensable value of public services. Local and regional governments, alongside their dedicated workers, have been the frontline heroes, responding to emergencies, protecting communities, and implementing critical public policies. However, the crisis has unveiled a global investment deficit and a shortage of essential staffing in local public services, disproportionately affecting underserved regions. Decades of defunding, austerity measures, privatization, and digital-only service delivery have exacerbated inequalities and left many communities underserved.
These reports highlight the pivotal role of public banks in addressing these challenges. Globally, there are 910 public banks, collectively holding an astounding $48.71 trillion in assets. This vast pool of public resources offers immense potential to strengthen local public service provision, accelerate de-carbonization efforts, and nurture inclusive socio-economic development. The democratization of public banks should be a top priority for trade unions worldwide, as they can play a central role in shaping a fairer future.
The recent bank failures in Silicon Valley, New York, and Switzerland serve as stark reminders of the consequences when profit takes precedence over societal and environmental well-being. It is time to pivot towards a democratic public banking alternative, characterized by transparent governance and a mandate to drive green and just transitions in the public interest.
The reports underscore the importance of investing in public services and harnessing the untapped potential of public banks, especially the European Investment Bank (EIB). As highlighted in our joint op-ed with Counter Balance, the EIB, as the largest multilateral development bank globally, has a significant role to play. Its €249 billion in subscribed capital derives from the taxes we contribute through member state contributions. However, a shift is urgently needed to ensure the EIB aligns with our most pressing needs, such as affordable housing and energy, rather than a profit-driven agenda that often benefits large corporations.
Read the PSI report here.
Read the Counter Balance report here.
Read the op-ed by Frank Vanaerschot (Counter Balance) and Jan Willem Goudriaan (EPSU) in EU Observer here.
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