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Christine Lagarde, president of the European Central Bank, speaks to the media following a meeting in Frankfurt, Germany on March 12, 2020.

Christine Lagarde, president of the European Central Bank, speaks to the media following a meeting in Frankfurt, Germany on March 12, 2020. (Photo: Thomas Lohnes/Getty Images)

By Pouring Billions Into Fossil Fuel Industry, EU's Central Bank Accused of 'Playing Both Firefighter and Arsonist'

"By recklessly buying billions in fossil fuel bonds the bank is propping up the single biggest obstacle to tackling the climate crisis."

Jessica Corbett

After the European Union's central bank on Thursday approved what Reuters called "a bigger-than-expected" expansion of an economic stimulus package necessitated by the coronavirus pandemic, climate campaigners expressed concern that planet-destroying fossil fuel companies could get tens of billions of dollars in the Eurozone relief funding.

"This is increasingly looking like a recovery package for polluters, not people, despite the growing support for a truly green and just recovery."
—Nick Bryer, 350.org

The European Central Bank (ECB) Governing Council extended an emergency asset purchase program to June 2021 and expanded it by €600 billion to a total of €1.350 trillion. Reuters reported that the figure "was a compromise after policymakers discussed an expansion of between €500 billion and €750 billion."

Ahead of the council's Thursday meeting, 45 European groups endorsed an open letter encouraging ECB President Christine Lagarde to align the program with the goals of the 2015 Paris climate agreement and over 114,000 people signed a petition from SumOfUs, Reclaim Finance, and 350.org urging the bank to stop funding the climate crisis.

However, activists pointed out, the council declined to even address the climate crisis at the meeting, let alone block future fossil fuel funding. SumOfUs campaigner Leyla Larbi accused the ECB of "playing both firefighter and arsonist by strengthening multinational corporations pushing our climate to the brink with billions of euros."

In a joint statement, the groups behind the petition explained that the ECB's expansion of the asset purchase program "could finance polluters to up to €90 billion," meaning that the bank could ultimately "channel up to €220 billion to these companies while indiscriminately buying corporate assets to respond to the crisis."

The groups highlighted a Reclaim Finance analysis showing that 38 fossil fuel companies have received ECB support. "Most of these companies—like Shell or Total—plan on greatly increasing their fossil fuel production and one of them—Fortum—is even involved in the opening of a new German coal power plant," the statement said.

The groups also noted a Wednesday Greenpeace analysis which found that the ECB has already injected over €7.6 billion into fossil fuels since mid-March as part of its Covid-19 relief.

"The ECB and other central banks must change their ways," Greenpeace climate and energy campaigner Adam Pawloff said in a statement. "As the climate crisis continues to escalate, we can't afford any more public money going to fossil fuels."

Campaigners' condemnation of the ECB's moves at the Thursday meeting built on outrage and frustration sparked by Greenpeace's analysis.

"By recklessly buying billions in fossil fuel bonds the bank is propping up the single biggest obstacle to tackling the climate crisis—the fossil fuel industry," 350.org campaigner Nick Bryer declared Thursday. "This is increasingly looking like a recovery package for polluters, not people, despite the growing support for a truly green and just recovery."

Since the pandemic started, governments and international bodies worldwide have faced calls for Covid-19 recovery plans that provide direct relief to people not polluters, prioritize public health, and incorporate abmitious policies that tackle the human-caused climate crisis, including a just transition away from fossil fuels to clean energy.

In a Thursday blog post for 350.org—which has spearheaded the global push for a just recovery—campaigner Julia Krzyszkowska called out Lagarde and her fellow bank governors for ignoring climate science and "shirking their historic responsibility to lead Europe out of the post-pandemic economic crisis into a cleaner, fairer, safer future."

As Krzyszkowska wrote:

When she took office last year, President Lagarde worked hard to position herself as a leader worthy of the climate crisis era. She launched the ECB's strategic review and made it clear that the bank had a responsibility to support a green, sustainable transition of the European economy.

Where are those promises now, when the ECB is pumping incomprehensibly huge amounts of money into the economy, to help Europe reboot and recover from the crisis brought about by the Covid-19 pandemic?

Paul Schreiber, a campaigner at Reclaim Finance, also criticized Lagarde and the ECB governors for "simultaneously acknowledging climate urgency and refusing to act."

"This stance is unbearable," Schreiber said. "If the ECB's president claims that by buying a few green bonds the ECB contributes to the ecological transition, she cannot say that it does not contribute to climate chaos when it massively buys bonds linked to new fossil fuel projects."

Noting that "the devastating effects of the climate crisis are already here, and we can only expect the worst," Larbi from SumOfUS said, "Imagine the immediate and long-term damage these dirty multinationals will continue to cause with those extra no-green-strings-attached billions of euros."

"The European post-Covid economic recovery project is a historic opportunity to bring lasting and meaningful change for the planet and all its inhabitants," she added. "We cannot let the ECB ruin all these efforts."


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