The Reinvention of Development Banking in the European Union

Industrial Policy in the Single Market and the Emergence of a Field

Edited by Daniel Mertens, Matthias Thiemann, and Peter Volberding

Offers a new account of how national development banks are specifically impacted by EU regulations and constraints
Provides a synthetic view of the European field of development banking so readers can gain an understanding of how NDBs relate to EU institutions such as the European Investment Bank and European Investment Fund
Includes seven detailed case studies of European NDBs
Reviews the promises and pitfalls of European development banking going forward

The Reinvention of Development Banking in the European Union

Industrial Policy in the Single Market and the Emergence of a Field

Edited by Daniel Mertens, Matthias Thiemann, and Peter Volberding

Description

National development banks (NDBs) have transformed from outdated relics of national industrial policy to central pillars of the European Union's economic project. This trend, which accelerated after the Financial Crisis of 2007, has led to a proliferation of NDBs with an expanded size and scope. However, it is surprising that the EU -- which has championed market-oriented governance and strict competition policy -- has actually advocated for an expansion of NDBs. This book therefore asks, Why has the EU supported an increased role for NDBs, and how can we understand the dynamics between NDBs and European incentives and constraints?

To answer these questions, the contributing authors analyze the formation and evolution of a field of development banking within the EU, identifying a new field around an innovative conceptualization of state-backed financing for the purposes of policy implementation. Yet rather than focusing solely on national development banks, the authors instead broaden the focus to the entire ecosystem of the field of development banking, which includes political institutions (both in Brussels and in the member states), financing vehicles (such as the Juncker Plan), regulatory bodies (Directorate-General for Competition, Directorate-General for Economic and Financial Affairs), and commercial actors. Seven in-depth case studies on European NDBs, along with three chapters on European-level actors, detail this field of development banking, and answer the questions of when, where, and how development banking occurs within the EU.

The Reinvention of Development Banking in the European Union

Industrial Policy in the Single Market and the Emergence of a Field

Edited by Daniel Mertens, Matthias Thiemann, and Peter Volberding

1. Introduction: The Making of a European Field of Development Banking, Daniel Mertens, Matthias Thiemann, and Peter Volberding
Section I: Development Banking and European Governance
2. United in Diversity? Interests, Preferences, and Patterns of Engagement of Public Development Banks in the Implementation of the EU Budget, Eulalia Rubio and Matthias Thiemann
3. State Aid and National Development Banks in the EU, Peter Volberding
4. Leveraging Policy Steer? Industrial Policy, Risk-sharing, and the European Investment Bank, Stephany Griffith-Jones and Natalya Naqvi
Section II: The Many Faces of Development Banking in the EU
5. A German Model? KfW, Field Dynamics and the Europeanization of 'Promotional' Banking, Daniel Mertens
6. Privatization, Crisis, and the Transformation of Cassa Depositi e Prestiti, Fabio Bulfone and Donato Di Carlo
7. The Rise of Bpifrance: The Rebirth of a Dirigiste State?, Matthias Thiemann and Peter Volberding
8. Is a European "Hidden Investment State" Emerging in Spain? The Role of Instituto de Crédito Oficial, Judith Clifton, Daniel Díaz Fuentes, Clara García, and Ana Lara Gómez
9. Managing the Contradictions of Development Finance in the EU's Eastern Periphery: Development Banks in Hungary and Poland, Dóra Piroska and Katalin Mérő
10. Development Finance in the Baltic States and the process of Europeanisation, Olga Mikheeva and Egert Juuse
11. The Rise, Fall, and Return of Promotional Banking in Greece, Jens Bastian
12. Conclusion: Development Banking and the Future of European Capitalism, Daniel Mertens, Matthias Thiemann, and Peter Volberding

The Reinvention of Development Banking in the European Union

Industrial Policy in the Single Market and the Emergence of a Field

Edited by Daniel Mertens, Matthias Thiemann, and Peter Volberding

Author Information

Daniel Mertens, Professor of International Political Economy, University of Osnabrueck,Matthias Thiemann, Associate Professor of European Public Policy, Sciences Po,Peter Volberding, Consultant

Daniel Mertens is Professor of International Political Economy at the University of Osnabrück. Prior to that, he was an assistant professor at Goethe University Frankfurt and a visiting scholar at Northwestern University. His work ranges from the politics of credit markets and banking to analyses of the modern tax state.

Matthias Thiemann is an assistant professor for European Public Policy at Sciences Po. His work focuses on the reconfiguration of financial markets after the 2007-8 crisis, with a particular focus on shadow banking, macro-prudential regulation, and the role of development banks in stabilizing financial markets.

Peter Volberding recently graduated with a PhD from the Government Department at Harvard University. His dissertation focused on the interaction between development banks, private financial markets, and development financial instruments.

Contributors:

Jens Bastian, freelance analyst and economic advisor
Fabio Bulfone, Max Planck Institute for the Study of Societies
Judith Clifton, University of Cantabria
Donato Di Carlo, Max Planck Institute for the Study of Societies
Daniel Díaz-Fuentes, University of Cantabria
Clara García Fernández-Muro, Complutense University of Madrid
Ana Lara Gómez, University of Cantabria
Stephany Griffith-Jones, Columbia University
Egert Juuse, Tallinn University of Technology
Katalin Mérő, Budapest Business School
Daniel Mertens, University of Osnabrück
Olga Mikheeva, Tallinn University of Technology
Natalya Naqvi, London School of Economics and Political Science
Dóra Piroska, Central European University
Eulalia Rubio, Jacques Delors Institute
Matthias Thiemann, Sciences Po Paris
Peter Volberding, Conultant

The Reinvention of Development Banking in the European Union

Industrial Policy in the Single Market and the Emergence of a Field

Edited by Daniel Mertens, Matthias Thiemann, and Peter Volberding

Reviews and Awards

"This timely and innovative contribution explains the new ways in which European authorities, at both national and supranational levels, seek to exploit a renewed focus on development banking to advance critical economic and political goals. The volume shows that tensions abound, strategies differ, and the fight over rules is far from settled. The authors here provide a comprehensive account of development banking's evolution in Europe, while also distilling a number of new and very surprising findings about the engines of change. The study thus explains development banking's new role and power, but also attunes us to the larger phenomenon of capitalism's transformation over time." -- Rachel A. Epstein, Professor of International Relations and European Politics at the Josef Korbel School of International Studies, University of Denver

"Finance is not neutral. The type of finance determines how growth in the real economy is structured. This book is an important contribution, advancing our understanding of this relationship and hence how finance is shaped and can be shaped to deliver long-run development and growth trajectories in Europe. It provides a rich history of the different evolutions, trajectories, and institutional setups of national development banks while also uncovering key lessons about instruments, structures, and levels of coordination across policy spheres. This is a valuable reading for anyone interested in the political economy of development banking and the various roles that development banks and institutions can play to deliver economic goals." -- Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at University College London and Founding Director of the Institute for Innovation and Public Purpose (IIPP)