Brussels, 26/01/2015 (Agence Europe) On Monday 26 January, the MEPs of the economic and monetary affairs committee were overall welcoming of the European Fund for Strategic Investments (EFSI), and of Commissioner Jyrki Katainen, who attended the meeting to defend it.
However, they had plenty of questions for the Finn on the real impact on the economy of this Fund to implement the Juncker investment plan, which is designed to draw down more than €300 billion of private capital over three years. They also questioned him about the division of the investments between the regions of Europe, with some MEPs expressing concern that the poorest regions would be left out. The governance of the Fund and the independence of the selection of the projects were other subjects of concern.
In his opening comments, the Vice-President for Investment reiterated the objectives of the Fund, which could be used for higher-risk projects, not something the European Investment Bank currently gets involved in. The EFSI could create up to 1.3 million jobs in the EU, he noted.
On the governance of the Fund, Katainen said that the member states and national public banks could also have a seat on the EFSI steering committee, which is currently made up of the EIB and the Commission. It is this committee which will set the level of risks for the investment policy. Alongside this, a further investment committee will select the projects and assess their viability. This committee will ultimately decide on the projects and the EIB will legally validate them. It will be “politically independent”, said Katainen, but he declined to go into details on the independence criteria. “If there are rumours that the projects to be funded are selected on the basis of a given political decision rather than on the grounds of merit, the private sector will not invest, that is what they are telling us”, the Commissioner stressed.
The criteria decided upon to select the projects have not yet been finalised, but the underlying principles, on the other hand, are something everybody will be able to agree on: they will be related to the single digital market and the Energy Union, fighting climate change and promoting energy efficiency. The projects funded will bring together countries from the North and the South, and countries from the East and the West of Europe. On projects of this kind, “there will be no differences, it is important to everybody”, the Finnish Commissioner stressed.
In response to concerns that the countries with the most economic muscle and the greatest budgetary virtue would be favoured under the EFSI, Katainen also pointed out that “it is not the countries which invest the most in the Fund which will benefit the most from it”. He reiterated the principle of the budgetary neutrality of the EFSI with regard to the Stability and Growth Pact for countries making a direct contribution to it. He added that it would be possible for countries experiencing budgetary difficulties to use the structural funds for co-financing leverage within the Fund. In that specific framework, however, countries above a deficit of 3% of GDP would not enjoy the same flexibility of the Stability Pact.
And it is not in any case the Commission which will be responsible for handing out the money, as it will be up to the “promoters of the projects to apply for it”. “But we must make sure that this funding gets to all of Europe”, the Commissioner took pains to stress. He concluded: “if we see that the money only goes to the solidest countries, we will have failed. We will have to make sure that the selection is better divided up”. (SP)