Brussels, 18/12/2014 (Agence Europe) - On Thursday 18 December, EU heads of state gave their political backing to the European Commission's investment plan that aims to attract private funding of €315 billion between 2015 and 2017.
The summit stressed the urgent need to act speedily and establish a European Fund for Strategic Investments (EFSI) as early as mid-2015 under the aegis of the EIB (see EUROPE 11220 and 11205). Using the Community Method, the legislative procedure to establish this guarantee fund, which will be based on cash from the EU budget (€8 billion) and a contribution from the EIB (€5 billion), will begin on 13 January 2015. The EFSI will use the leverage effect to raise substantial investment sums and will bear any initial losses that might be made by the financed projects.
In agreement with the Italian prime minister, Matteo Renzi, the president of the European Council, Donald Tusk, said the Juncker Plan was certainly not a “silver bullet,” but rather a “realistic and ambitious first step.” He said it was part of a broad economic strategy based on “healthy public finances” and the pursuit of “structural reforms.” Crucially, he said, the EU28 has chosen “a direction” without considering any geographical or sector-specific distribution of the projects to be financed. The president of the European Commission, Jean-Claude Juncker, was pleased with the support, pointing out that the EU is facing an investment blackout and the EIB is prepared to pre-finance the initial projects, even before the EFSI is set up.
National contributions. “The EFSI will be open to contributions from the member states directly or through national promotional banks. The European Summit takes note of the favourable position the Commission has indicated towards such capital contributions in the context of the assessment of public finances under the Stability and Growth Pact, necessarily in line with the flexibility that is built into its existing rules.” This is anchored in a very clear and precise provision in the SGP, explained Juncker, adding that there had not been any detailed debate about national contributions because projects have not yet reached maturity, although some countries hinted that they were prepared to contribute to the EFSI directly under certain conditions. Tusk pointed out that the summit that evening wasn't a donor conference.
Alongside direct contributions to the EFSI, the French president, François Hollande, talked of the possibility of countries or regions providing national co-financing for projects. France says investment should focus on energy transition, digital affairs, infrastructure and training. The German chancellor, Angela Merkel, said projects should be selected at the EIB in order to guarantee a process focused on economic, rather than political, interests.
Stressing the importance of removing regulatory barriers to investment, Europe's leaders called for a “speeding up of adoption, transposition and implementation of Union legislation in the Single Market area and enhancing efforts to remove barriers and complete the Internal Market in products and services.” They invited the Commission to “present a comprehensive Energy Union proposal well ahead of the March 2015 European Council” and an ambitious communication on the Digital Single Market “well before the June 2015 European Summit.” When it comes to trade, they said that all necessary efforts should be made to conclude by the end of 2015 the talks with the United States on a Transatlantic Trade Partnership.
EMU. In February, the EU28 will have a discussion about the coordination of economic policies within the eurozone based on an analysis drawn up by the four presidents (of the Commission, European Council, eurozone and ECB), who will unveil a report to the summit in June. France and Germany will prepare common proposals, and Paris says the idea of a budget for the eurozone will be raised during this process. Angela Merkel said an analysis would need to be presented to explain why the current direction of EMU is not sufficient to ensure long-term growth and competitiveness. (MB together with AN/LC).