Diplomacy & Defense Think Tank News

This paper examines the extent to which addressing climate-related risks and supporting sustainable finance fit into the current set of central bank mandates and objectives. To this end, we conduct a detailed analysis of central bank mandates and objectives, using the IMF’s Central Bank Legislation Database, and compare these to current arrangements and sustainability-related policies central banks have adopted in practice. To scrutinise the alignment of mandates with climate-related policies, we differentiate between the impact of environmental factors on the conventional core objectives of central banking and a potential supportive role of central banks with regard to green finance and sustainability. Of the 135 central banks in our sample, only 12% have explicit sustainability mandates, while another 40% are mandated to support the government’s policy priorities, which in most cases include sustainability goals. However, given that climate risks can directly affect central banks’ traditional core responsibilities, most notably monetary and financial stability, even central banks without explicit or implicit sustainability objectives ought to incorporate climate-related physical and transition risks into their core policy implementation frameworks in order to efficiently and successfully safeguard macro-financial stability.

This paper examines the extent to which addressing climate-related risks and supporting sustainable finance fit into the current set of central bank mandates and objectives. To this end, we conduct a detailed analysis of central bank mandates and objectives, using the IMF’s Central Bank Legislation Database, and compare these to current arrangements and sustainability-related policies central banks have adopted in practice. To scrutinise the alignment of mandates with climate-related policies, we differentiate between the impact of environmental factors on the conventional core objectives of central banking and a potential supportive role of central banks with regard to green finance and sustainability. Of the 135 central banks in our sample, only 12% have explicit sustainability mandates, while another 40% are mandated to support the government’s policy priorities, which in most cases include sustainability goals. However, given that climate risks can directly affect central banks’ traditional core responsibilities, most notably monetary and financial stability, even central banks without explicit or implicit sustainability objectives ought to incorporate climate-related physical and transition risks into their core policy implementation frameworks in order to efficiently and successfully safeguard macro-financial stability.

We call for strengthening the Global Financial Safety Net (GFSN) to manage the economic effects of the outbreak of COVID-19, in particular the massive capital outflows from emerging market and developing economies and the global shortage of dollar liquidity. Both the United Nations (UN) and the International Monetary Fund (IMF) estimate that emerging market and developing countries (EMDEs) need an immediate $2.5 trillion, yet the financing available to them is just $700 to $971 billion. To meet these immediate needs we propose to: (i) broaden the coverage of the Federal Reserve currency swaps; (ii) issue at least $500 billion of Special Drawing Rights through the IMF; (iii) improve the IMF’s precautionary and emergency facilities; (iv) establish a multilateral swap facility at the IMF; (v) increase the resources and geographic coverage of Regional Financial Arrangements; (vi) coordinate capital flow management measures; (vii) initiate debt restructuring and relief initiatives; and (viii) request that credit-rating agencies stop making downgrades during the emergency. It argues that beyond these immediate measures, leaders should swiftly move to address the following structural gaps in the GFSN: (i) agree on a quota reform at the IMF; (ii) create an appropriate Sovereign Debt Restructuring Regime; (iii) expand surveillance activity; and (iv) adopt IMF governance reform and strengthen its relations with all agents of the GFSN. All of these immediate and intermediate reforms must be calibrated toward a just transition to a more stable, inclusive, and sustainable global economy.

We call for strengthening the Global Financial Safety Net (GFSN) to manage the economic effects of the outbreak of COVID-19, in particular the massive capital outflows from emerging market and developing economies and the global shortage of dollar liquidity. Both the United Nations (UN) and the International Monetary Fund (IMF) estimate that emerging market and developing countries (EMDEs) need an immediate $2.5 trillion, yet the financing available to them is just $700 to $971 billion. To meet these immediate needs we propose to: (i) broaden the coverage of the Federal Reserve currency swaps; (ii) issue at least $500 billion of Special Drawing Rights through the IMF; (iii) improve the IMF’s precautionary and emergency facilities; (iv) establish a multilateral swap facility at the IMF; (v) increase the resources and geographic coverage of Regional Financial Arrangements; (vi) coordinate capital flow management measures; (vii) initiate debt restructuring and relief initiatives; and (viii) request that credit-rating agencies stop making downgrades during the emergency. It argues that beyond these immediate measures, leaders should swiftly move to address the following structural gaps in the GFSN: (i) agree on a quota reform at the IMF; (ii) create an appropriate Sovereign Debt Restructuring Regime; (iii) expand surveillance activity; and (iv) adopt IMF governance reform and strengthen its relations with all agents of the GFSN. All of these immediate and intermediate reforms must be calibrated toward a just transition to a more stable, inclusive, and sustainable global economy.

We call for strengthening the Global Financial Safety Net (GFSN) to manage the economic effects of the outbreak of COVID-19, in particular the massive capital outflows from emerging market and developing economies and the global shortage of dollar liquidity. Both the United Nations (UN) and the International Monetary Fund (IMF) estimate that emerging market and developing countries (EMDEs) need an immediate $2.5 trillion, yet the financing available to them is just $700 to $971 billion. To meet these immediate needs we propose to: (i) broaden the coverage of the Federal Reserve currency swaps; (ii) issue at least $500 billion of Special Drawing Rights through the IMF; (iii) improve the IMF’s precautionary and emergency facilities; (iv) establish a multilateral swap facility at the IMF; (v) increase the resources and geographic coverage of Regional Financial Arrangements; (vi) coordinate capital flow management measures; (vii) initiate debt restructuring and relief initiatives; and (viii) request that credit-rating agencies stop making downgrades during the emergency. It argues that beyond these immediate measures, leaders should swiftly move to address the following structural gaps in the GFSN: (i) agree on a quota reform at the IMF; (ii) create an appropriate Sovereign Debt Restructuring Regime; (iii) expand surveillance activity; and (iv) adopt IMF governance reform and strengthen its relations with all agents of the GFSN. All of these immediate and intermediate reforms must be calibrated toward a just transition to a more stable, inclusive, and sustainable global economy.

New York lærer os på ny, at coronaens arkitektur følger økonomiske strukturer, vi allerede kender. De er forudsigelige. Corona næres ved ulighed og finder vej gennem de sociale revner, som arbejdsløshed, små boliger og privat sundhedsvæsen efterlader

Die Rettung der Luftfahrt durch den Staat muss kurz- und langfristig dem globalen Gemeinwohl dienen. Es ist daher nur fair, dass staatliche Beihilfen an Bedingungen geknüpft werden.

Beispielsweise sollte die Lufthansa in den kommenden Jahren keine eigenen Aktien zurückkaufen oder Dividenden zahlen dürfen. Auf diese Weise kann dem Unternehmen selbst und seinen Mitarbeitern geholfen werden, ohne dass die Aktionäre in dieser Krisensituation übervorteilt würden.

Flüge erheblich teurer machen, Kurzflüge verbieten

Nach der Corona-Krise wird sich die angeschlagene Luftfahrtindustrie wahrscheinlich für niedrige Löhne, Auslagerungen und befristete Verträge einsetzen. Eine weitere Bedingung für staatliche Beihilfen sollte daher die Einbindung von Gewerkschaften bei der Ausarbeitung der Rettungsmaßnahmen für die Luftfahrt sein, um nach der Krise qualitativ hochwertige Arbeitsplätze zu gewährleisten.

Staatliche Beihilfen für die deutsche Luftfahrt sollten gleichzeitig strengen Umweltbedingungen unterliegen. Deutschland sollte von der Lufthansa verlangen, dass sie Vorreiterin in Sachen Nachhaltigkeit wird.

Gemäß dem freiwilligen Klimaschutzinstrument Corsia der Internationalen Zivilluftfahrtorganisation ICAO sollen Fluggesellschaften vom kommenden Jahr an ihren CO2-Fußabdruck verringern und jedes Jahr zwei Prozent energieeffizienter werden. Sie sollen die Emissionen pro Passagierkilometer senken und nur noch klimaneutral wachsen.

Wissenschaftler und Umweltverbände kritisieren, dass Corsia Schwächen und Schlupflöcher aufweist. Ohnehin reicht der Ansatz nicht aus, um unsere Gesellschaften bis zur Mitte dieses Jahrhunderts klimaneutral zu machen, wie es das Pariser Klimaabkommen und der "Green Deal" der Europäischen Kommission vorsehen.

Um diese Ziele zu erreichen, muss der Luftverkehrssektor zusätzliche Maßnahmen einführen. Denn der Flugverkehr ist ein wichtiger Hebel für mehr Klimaschutz: In den letzten Jahren waren die globalen CO2-Emissionen des Luftverkehrs so hoch wie Deutschlands Emissionen und sind stetig gestiegen. Dass die Bundesregierung kürzlich die Luftverkehrssteuer erhöht hat, geht in die richtige Richtung.

Weitere Ansatzpunkte für mehr Klimaschutz in der Luftfahrt bestünden darin, die externen Umweltkosten des Fliegens einzupreisen und Flüge erheblich teurer zu machen und, wie es EU-Klimakommissar Frans Timmermans 2019 gefordert hat, Kurzstreckenflüge bis 500 Kilometer zu verbieten.

Nach der Krise sollten die Bundesregierung sowie der Luftverkehrssektor selbst auch finanziell zur Entwicklung des elektrischen Fliegens und klimaneutraler Kraftstoffe beitragen. Letzteres könnte ebenfalls eine Auflage für Beihilfen in der aktuellen Krise werden.

In der Finanz- und Wirtschaftskrise im Jahr 2008 hat Deutschland manch eine Gelegenheit verpasst, die Rettung von Banken an soziale und nachhaltige Bedingungen zu knüpfen. In der aktuellen Krise sollten Konjunktur- und Rettungspakete in erster Linie eine nachhaltige Entwicklung und eine gesunde Gesellschaft fördern, nicht kurzfristige wirtschaftliche Interessen und die Depots der Aktionäre.

Die Rettung der Luftfahrt durch den Staat muss kurz- und langfristig dem globalen Gemeinwohl dienen. Es ist daher nur fair, dass staatliche Beihilfen an Bedingungen geknüpft werden.

Beispielsweise sollte die Lufthansa in den kommenden Jahren keine eigenen Aktien zurückkaufen oder Dividenden zahlen dürfen. Auf diese Weise kann dem Unternehmen selbst und seinen Mitarbeitern geholfen werden, ohne dass die Aktionäre in dieser Krisensituation übervorteilt würden.

Flüge erheblich teurer machen, Kurzflüge verbieten

Nach der Corona-Krise wird sich die angeschlagene Luftfahrtindustrie wahrscheinlich für niedrige Löhne, Auslagerungen und befristete Verträge einsetzen. Eine weitere Bedingung für staatliche Beihilfen sollte daher die Einbindung von Gewerkschaften bei der Ausarbeitung der Rettungsmaßnahmen für die Luftfahrt sein, um nach der Krise qualitativ hochwertige Arbeitsplätze zu gewährleisten.

Staatliche Beihilfen für die deutsche Luftfahrt sollten gleichzeitig strengen Umweltbedingungen unterliegen. Deutschland sollte von der Lufthansa verlangen, dass sie Vorreiterin in Sachen Nachhaltigkeit wird.

Gemäß dem freiwilligen Klimaschutzinstrument Corsia der Internationalen Zivilluftfahrtorganisation ICAO sollen Fluggesellschaften vom kommenden Jahr an ihren CO2-Fußabdruck verringern und jedes Jahr zwei Prozent energieeffizienter werden. Sie sollen die Emissionen pro Passagierkilometer senken und nur noch klimaneutral wachsen.

Wissenschaftler und Umweltverbände kritisieren, dass Corsia Schwächen und Schlupflöcher aufweist. Ohnehin reicht der Ansatz nicht aus, um unsere Gesellschaften bis zur Mitte dieses Jahrhunderts klimaneutral zu machen, wie es das Pariser Klimaabkommen und der "Green Deal" der Europäischen Kommission vorsehen.

Um diese Ziele zu erreichen, muss der Luftverkehrssektor zusätzliche Maßnahmen einführen. Denn der Flugverkehr ist ein wichtiger Hebel für mehr Klimaschutz: In den letzten Jahren waren die globalen CO2-Emissionen des Luftverkehrs so hoch wie Deutschlands Emissionen und sind stetig gestiegen. Dass die Bundesregierung kürzlich die Luftverkehrssteuer erhöht hat, geht in die richtige Richtung.

Weitere Ansatzpunkte für mehr Klimaschutz in der Luftfahrt bestünden darin, die externen Umweltkosten des Fliegens einzupreisen und Flüge erheblich teurer zu machen und, wie es EU-Klimakommissar Frans Timmermans 2019 gefordert hat, Kurzstreckenflüge bis 500 Kilometer zu verbieten.

Nach der Krise sollten die Bundesregierung sowie der Luftverkehrssektor selbst auch finanziell zur Entwicklung des elektrischen Fliegens und klimaneutraler Kraftstoffe beitragen. Letzteres könnte ebenfalls eine Auflage für Beihilfen in der aktuellen Krise werden.

In der Finanz- und Wirtschaftskrise im Jahr 2008 hat Deutschland manch eine Gelegenheit verpasst, die Rettung von Banken an soziale und nachhaltige Bedingungen zu knüpfen. In der aktuellen Krise sollten Konjunktur- und Rettungspakete in erster Linie eine nachhaltige Entwicklung und eine gesunde Gesellschaft fördern, nicht kurzfristige wirtschaftliche Interessen und die Depots der Aktionäre.

Die Rettung der Luftfahrt durch den Staat muss kurz- und langfristig dem globalen Gemeinwohl dienen. Es ist daher nur fair, dass staatliche Beihilfen an Bedingungen geknüpft werden.

Beispielsweise sollte die Lufthansa in den kommenden Jahren keine eigenen Aktien zurückkaufen oder Dividenden zahlen dürfen. Auf diese Weise kann dem Unternehmen selbst und seinen Mitarbeitern geholfen werden, ohne dass die Aktionäre in dieser Krisensituation übervorteilt würden.

Flüge erheblich teurer machen, Kurzflüge verbieten

Nach der Corona-Krise wird sich die angeschlagene Luftfahrtindustrie wahrscheinlich für niedrige Löhne, Auslagerungen und befristete Verträge einsetzen. Eine weitere Bedingung für staatliche Beihilfen sollte daher die Einbindung von Gewerkschaften bei der Ausarbeitung der Rettungsmaßnahmen für die Luftfahrt sein, um nach der Krise qualitativ hochwertige Arbeitsplätze zu gewährleisten.

Staatliche Beihilfen für die deutsche Luftfahrt sollten gleichzeitig strengen Umweltbedingungen unterliegen. Deutschland sollte von der Lufthansa verlangen, dass sie Vorreiterin in Sachen Nachhaltigkeit wird.

Gemäß dem freiwilligen Klimaschutzinstrument Corsia der Internationalen Zivilluftfahrtorganisation ICAO sollen Fluggesellschaften vom kommenden Jahr an ihren CO2-Fußabdruck verringern und jedes Jahr zwei Prozent energieeffizienter werden. Sie sollen die Emissionen pro Passagierkilometer senken und nur noch klimaneutral wachsen.

Wissenschaftler und Umweltverbände kritisieren, dass Corsia Schwächen und Schlupflöcher aufweist. Ohnehin reicht der Ansatz nicht aus, um unsere Gesellschaften bis zur Mitte dieses Jahrhunderts klimaneutral zu machen, wie es das Pariser Klimaabkommen und der "Green Deal" der Europäischen Kommission vorsehen.

Um diese Ziele zu erreichen, muss der Luftverkehrssektor zusätzliche Maßnahmen einführen. Denn der Flugverkehr ist ein wichtiger Hebel für mehr Klimaschutz: In den letzten Jahren waren die globalen CO2-Emissionen des Luftverkehrs so hoch wie Deutschlands Emissionen und sind stetig gestiegen. Dass die Bundesregierung kürzlich die Luftverkehrssteuer erhöht hat, geht in die richtige Richtung.

Weitere Ansatzpunkte für mehr Klimaschutz in der Luftfahrt bestünden darin, die externen Umweltkosten des Fliegens einzupreisen und Flüge erheblich teurer zu machen und, wie es EU-Klimakommissar Frans Timmermans 2019 gefordert hat, Kurzstreckenflüge bis 500 Kilometer zu verbieten.

Nach der Krise sollten die Bundesregierung sowie der Luftverkehrssektor selbst auch finanziell zur Entwicklung des elektrischen Fliegens und klimaneutraler Kraftstoffe beitragen. Letzteres könnte ebenfalls eine Auflage für Beihilfen in der aktuellen Krise werden.

In der Finanz- und Wirtschaftskrise im Jahr 2008 hat Deutschland manch eine Gelegenheit verpasst, die Rettung von Banken an soziale und nachhaltige Bedingungen zu knüpfen. In der aktuellen Krise sollten Konjunktur- und Rettungspakete in erster Linie eine nachhaltige Entwicklung und eine gesunde Gesellschaft fördern, nicht kurzfristige wirtschaftliche Interessen und die Depots der Aktionäre.

The European Investment Bank (EIB) not only is the bank of the European Union (EU), it also is the world’s largest multilateral lender. Hitherto rarely at the centre of public attention, the ongoing negotiations on the next EU budget round, the Multiannual Financial Framework (2021-2027) (MFF), have placed the EIB in the midst of the political struggles over form and function of the European development finance architecture.
In the context of the negotiations on the MFF 2021-2027, the European Commission (EC) proposes to reform the financing of its external action. With the Neighbourhood, Development and International Cooperation Instrument (NDICI), the Commission seeks to overhaul a multi-layered and fragmented external financial architecture and to integrate the eleven existing instruments into one. At the origin of the EC’s proposal lies the desire to develop a flexible, consistent, and simplified system (European Commission 2018). Geopolitical interests and considerations about aid effectiveness and impact are the main drivers behind this reform proposal. The debate centres on the allocation of funds and more importantly on the question of how “to do” development finance in the future. The substantive debate on development effectiveness and impact thereby also morphs into an institutional question, with different stakeholders advancing distinct preferences.
Against this backdrop, the paper takes stock of the European development finance landscape and the EIB’s role as part of this landscape. It looks at the interactions between different European development stakeholders and assesses the proposed reform and its potential impact on European development policy. With the EIB at the heart of the European financial architecture, the paper seeks to answer three questions: (1) What is the EIB’s role in the European development landscape and how does it respond to its operational environment? (2) What is the EIB’s institutional relationship with other EU actors. What are the main challenges and points of divergence? (3) What are the competing visions for the future of European development finance and what role will the EIB be able to play in the different scenarios?

The European Investment Bank (EIB) not only is the bank of the European Union (EU), it also is the world’s largest multilateral lender. Hitherto rarely at the centre of public attention, the ongoing negotiations on the next EU budget round, the Multiannual Financial Framework (2021-2027) (MFF), have placed the EIB in the midst of the political struggles over form and function of the European development finance architecture.
In the context of the negotiations on the MFF 2021-2027, the European Commission (EC) proposes to reform the financing of its external action. With the Neighbourhood, Development and International Cooperation Instrument (NDICI), the Commission seeks to overhaul a multi-layered and fragmented external financial architecture and to integrate the eleven existing instruments into one. At the origin of the EC’s proposal lies the desire to develop a flexible, consistent, and simplified system (European Commission 2018). Geopolitical interests and considerations about aid effectiveness and impact are the main drivers behind this reform proposal. The debate centres on the allocation of funds and more importantly on the question of how “to do” development finance in the future. The substantive debate on development effectiveness and impact thereby also morphs into an institutional question, with different stakeholders advancing distinct preferences.
Against this backdrop, the paper takes stock of the European development finance landscape and the EIB’s role as part of this landscape. It looks at the interactions between different European development stakeholders and assesses the proposed reform and its potential impact on European development policy. With the EIB at the heart of the European financial architecture, the paper seeks to answer three questions: (1) What is the EIB’s role in the European development landscape and how does it respond to its operational environment? (2) What is the EIB’s institutional relationship with other EU actors. What are the main challenges and points of divergence? (3) What are the competing visions for the future of European development finance and what role will the EIB be able to play in the different scenarios?

The European Investment Bank (EIB) not only is the bank of the European Union (EU), it also is the world’s largest multilateral lender. Hitherto rarely at the centre of public attention, the ongoing negotiations on the next EU budget round, the Multiannual Financial Framework (2021-2027) (MFF), have placed the EIB in the midst of the political struggles over form and function of the European development finance architecture.
In the context of the negotiations on the MFF 2021-2027, the European Commission (EC) proposes to reform the financing of its external action. With the Neighbourhood, Development and International Cooperation Instrument (NDICI), the Commission seeks to overhaul a multi-layered and fragmented external financial architecture and to integrate the eleven existing instruments into one. At the origin of the EC’s proposal lies the desire to develop a flexible, consistent, and simplified system (European Commission 2018). Geopolitical interests and considerations about aid effectiveness and impact are the main drivers behind this reform proposal. The debate centres on the allocation of funds and more importantly on the question of how “to do” development finance in the future. The substantive debate on development effectiveness and impact thereby also morphs into an institutional question, with different stakeholders advancing distinct preferences.
Against this backdrop, the paper takes stock of the European development finance landscape and the EIB’s role as part of this landscape. It looks at the interactions between different European development stakeholders and assesses the proposed reform and its potential impact on European development policy. With the EIB at the heart of the European financial architecture, the paper seeks to answer three questions: (1) What is the EIB’s role in the European development landscape and how does it respond to its operational environment? (2) What is the EIB’s institutional relationship with other EU actors. What are the main challenges and points of divergence? (3) What are the competing visions for the future of European development finance and what role will the EIB be able to play in the different scenarios?

Ny artikel undersøger forskydningerne i Udenrigsministeriets magt og status fra 1995 til i dag

Die Corona-Pandemie könnte Anlass sein, gemeinsam eine neue globale Partnerschaft zu begründen. Der Gastbeitrag.

Die Corona-Pandemie könnte Anlass sein, gemeinsam eine neue globale Partnerschaft zu begründen. Der Gastbeitrag.

Die Corona-Pandemie könnte Anlass sein, gemeinsam eine neue globale Partnerschaft zu begründen. Der Gastbeitrag.

Refugee response has become an important topic in economic-development policy, but the majority of macro-level analyses do not find an association between country income level and refugee numbers. We argue that the apparent lack of association stems from using the United Nations High Commission for Refugees’ count of refugees as the dependent variable in these analyses. Refugee counts reflect processes that take place in countries of arrival. In contrast, the decision to seek asylum may be more closely linked to conditions, including income, in countries of origin. Drawing on the ‘migration-hump’ concept from economic migration, we model counts of refugees and asylum seekers from conflict-affected countries for the same time period and find that differences in the level of gross domestic product (GDP) predict new asylum applications but not new refugee numbers. We outline reasons for this statistical finding, and discuss theoretical and practical consequences for our understanding of the relationship between country income and asylum-seeking.

Refugee response has become an important topic in economic-development policy, but the majority of macro-level analyses do not find an association between country income level and refugee numbers. We argue that the apparent lack of association stems from using the United Nations High Commission for Refugees’ count of refugees as the dependent variable in these analyses. Refugee counts reflect processes that take place in countries of arrival. In contrast, the decision to seek asylum may be more closely linked to conditions, including income, in countries of origin. Drawing on the ‘migration-hump’ concept from economic migration, we model counts of refugees and asylum seekers from conflict-affected countries for the same time period and find that differences in the level of gross domestic product (GDP) predict new asylum applications but not new refugee numbers. We outline reasons for this statistical finding, and discuss theoretical and practical consequences for our understanding of the relationship between country income and asylum-seeking.

Refugee response has become an important topic in economic-development policy, but the majority of macro-level analyses do not find an association between country income level and refugee numbers. We argue that the apparent lack of association stems from using the United Nations High Commission for Refugees’ count of refugees as the dependent variable in these analyses. Refugee counts reflect processes that take place in countries of arrival. In contrast, the decision to seek asylum may be more closely linked to conditions, including income, in countries of origin. Drawing on the ‘migration-hump’ concept from economic migration, we model counts of refugees and asylum seekers from conflict-affected countries for the same time period and find that differences in the level of gross domestic product (GDP) predict new asylum applications but not new refugee numbers. We outline reasons for this statistical finding, and discuss theoretical and practical consequences for our understanding of the relationship between country income and asylum-seeking.

France and Germany face common issues in global development policy, including climate change, migration and security. At the same time, their aid is spread across similar countries and sectors. Based on a quantitative overlap measure, the study reveals that the Franco-German overlap of aid allocation is more than four times as high as for the average donor. If France and Germany can bridge their divisions, the high overlap provides a momentum to take a leading role for international donor coordination. This is key in view of the opportunities and challenges of 2020 and beyond, including the German presidency of the Council of the European Union (EU), climate change as well as the recent Covid-19 pandemic. Against this background, this study explores the systemic challenges and opportunities for a stronger Franco-German coordination in the framework of four country case studies, where development cooperation of both donors strongly overlaps.
Evidence from Benin, Cameroon, India and Morocco reveals that the complex development systems of the two donors impose differing time horizons and standards of procedure. Moreover, geo-political priorities complicate consensus building. The case studies stress that sustainable Franco-German cooperation only works based on a regular exchange both on the political and operational level. In this regard, the long-lasting partnership between the French and German development banks, Agence Française de Développment (AFD) and Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW), illustrates how mutual understanding and careful reconciliation of approaches can facilitate cooperation. Combining capacities, France and Germany finance large-scale projects to achieve sustainable development and, this way, crowd-in resources by other development actors from the EU and beyond. Although reconciling standards in technical cooperation is more challenging, the French and German agencies, Gesellschaft für Internationale Zusammenarbeit and Expertise France, are currently negotiating similar measures.