National development banks (NDBs) have transformed from outdated relics of national industrial policy to central pillars of the European Union’s economic project.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 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? In order to answer these questions, this book analyzes the formation and evolution of a field of development banking within the EU. We identify a new field around an innovative conceptualization of state-backed financing for the purposes of policy implementation. However, rather than focusing solely on national development banks, we 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 (DG Competition, DG ECFIN), 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. We conclude that the EU has supported the expansion of NDBs as a means to support a European-wide industrial policy without creating new financial obligations, and that the European dynamics have differentially impacted Member States’ NDBs leading to a fragmented and asymmetrical field.