Brussels, 23/05/2012 (Agence Europe) - The Commissioner for economic and monetary affairs, Olli Rehn, has welcomed the interinstitutional agreement obtained on Tuesday for launching a pilot phase for the “project bonds initiative”. The initiative aims to facilitate funding, through a mechanism for large-scale infrastructure projects, which the European Commission had already presented a year ago (EUROPE 10618). It comes in the nick of time, just before the informal European summit, which will partly be focusing on measures to relaunch growth.
The commissioner explained in a press release that: “Already in its pilot phase, project bonds could unlock up to €4.6 billion of investment in infrastructure and innovation, based on the leveraging effect of €230 million from the EU budget”. This funding could be used as a financial guarantee from the EU and the EIB to leverage less-expensive private funding for major infrastructure projects in the transport, energy and telecommunications sectors. Rehn said that this therefore involved “an important initiative that can contribute to strengthen our economy. Promoting public and private investment is indeed a cornerstone of our growth initiative”.
The Commission underlines its long held commitment to stimulate investment and Rehn indicated that, “Over the past two years, the Commission has put forward several ideas and initiatives to use public investment in a targeted manner to mobilise further private investment and to channel it to growth-enhancing projects and support green growth”. He mentioned, for example, that EU structural funds could also be used more effectively through limited risk-sharing with private investors (see other article).
The Social Democrat and the Christian Democrat groups at the European Parliament also welcomed the agreement on project bonds. Dominique Riquet (EPP, France), rapporteur on the Connecting Europe Facility of which project bonds form a part, said that, “we will not get back to economic growth unless budget discipline, which is absolutely necessary, is accompanied by targeted investment”. He added that, “these bonds are aimed at funding projects and will be a very useful tool for relaunching growth in Europe”. Göran Färm (S&D, Sweden), who headed the negotiations EP team within the trialogue, pointed out that they needed to find new ways of increasing investment in growth and bonds for major infrastructure work was one of these ways. His group is also discussing other possibilities, such as eurobonds, which he emphasised were also called “Delors bonds”. (MD/trans/fl)