Brussels, 17/12/2014 (Agence Europe) - The European leaders are to approve the outlines of the European Commission's investment plan and will discuss the Ukrainian dossier, on Thursday 18 and possibly also on Friday 19 December, at the first Summit to be chaired by the former Polish Prime Minister, Donald Tusk.
Wishing to make his mark, Tusk has invited the Twenty-Eight to arrive at around teatime on Thursday, so that they can be out of the building by midnight. His letter of invitation states that any other subject in suspense can be discussed on Friday, if needs be. Sources close to the President of the European Council have given to expect a change of style compared to the 'Van Rompuy' years: Tusk will not hesitate to give his opinion, but never forgetting that his role is to forge consensus between the member states. The heads of state and government will adopt conclusions which will be “shorter and more specific”, focusing on the broad political outlines in order to provide a clearer picture of the decisions made, according to a senior EU official.
The European Council will give its political approval to the investment plan designed to draw down €315 billion in private investment, which was presented by the Commission in late November (EUROPE 11205 and 11216). It will call for the swift creation, by mid-2015, of a European guarantee fund for strategic investments (EFSI), which will take the first hit in the event of any losses in the projects funded.
National contributions. On the basis of €8 billion in guarantees from the EU budget and a contribution of €5 billion from the EIB, the EFSI will be operational without the member states having to make a direct contribution to it. Even so, the President of the European Commission, Jean-Claude Juncker, addressing the capitals at the European Parliament on Wednesday 17 December, said “I need money”. By way of incentive to the small number of countries which have expressed an interest in directly funding the EFSI, the Commission suggests that the national contributions be neutral with regard to the Stability and Growth Pact, with specific guidelines on the flexibility of the Pact to be presented by the Commission in January 2015.
Against a backdrop of budgetary restrictions, the member states' enthusiasm at the idea of contributing to EFSI did not appear to be overwhelming, even if Italy intends to do so. “The European Council will not be a conference of the donors”, one ambassador said. There is a certain logic to the sequence: first of all, complete the legislative process for creating the EFSI, which will start in January, so as to allow the fund to be up and running by mid-2015, and then discuss direct contributions to the fund, the same senior official told us.
The question of the accountancy treatment of the national contributions to fund the investment projects selected, which is “theoretical” at this stage, the ambassador explained, could also come up in the debate. “There is no unanimity (at the Council) to rewrite the Stability Pact”, the official explained, adding that favourable treatment with regard to the Pact, as suggested by the Commission, is simply a reaffirmation of the flexibility already laid down in the Pact. On Tuesday, the Italian Prime Minister, Matteo Renzi, reiterated Italy's calls for major investments in public works not to be included in the Stability Pact calculations. In the opposite corner, however, Germany is championing adherence to the rules in place.
As for the risk of confusion between the Juncker plan and the cohesion policy, a number of central and eastern European beneficiary countries (Bulgaria, Slovakia, Czech Republic) expressed their concerns that credit will be withdrawn from this policy and channelled into the Juncker plan. At the European Parliament, Juncker expressed his expectations that the European Council would agree on “doubling up the use of innovative financial instruments in the framework of the structural funds” over the period 2014-2020, but did not clarify whether these tools would come in addition to his plan. Within a broader context, these countries have called for an extra year (up to 2016) to absorb the residual structural funds from the period 2007-2013. The Commission, which is reluctant to evolve the European rules, may make decisions on a case-by-case basis.
Project selection. A final question is the selection of the projects which will benefit from the Juncker plan. The list of 2,000 examples which was put to the European finance ministers by the EIB/Commission task force will be used to feed into a pipeline of projects, the merits of which will be assessed by an expert committee on the basis of criteria such as European interest, speed of execution and profitability.
The Commission, which is trying hard not to politicise the project selection process, has rejected any idea of national envelopes or quotas per sector. Even so, Juncker said that as they are “riskier” and “would not be possible” without the investment plan, the projects in question will “particularly benefit the countries which have been the hardest hit by the crisis”. Certain central and eastern European countries are also calling for a geographical distribution of projects. Furthermore, it is hard to imagine that the countries which make a direct contribution to the EFSI will not demand a right of scrutiny in the project selection process.
Lastly, the European Commission will underline the importance of removing the regulatory obstacles to investment in Europe and of completing the single market in strategic sectors such as energy and the digital economy. (MB with CG/JK/MD)