Brussels, 27/01/2015 (Agence Europe) - On Tuesday 27 January, the European finance ministers welcomed the proposed regulation instituting the European Fund for Strategic Investments (EFSI), which is designed to attract €315 billion in private investments over three years.
Many countries stress the importance of not politicising the process for the selection of projects to be supported by the fund, which will be launched in mid-2015 under the aegis of the EIB (see EUROPE 11229). “The projects must be chosen on the strength of their merits”, said Denmark, supported by Estonia, Sweden, the Netherlands and the United Kingdom. In a similar vein, Italy and Germany warned against the politics of the 'fair return', whereby any financial contribution would presuppose a 'return on the investment' in the selection of the projects. “At the same time, we have to ensure that the money does not go where it is not needed”, said the Italian minister, Pier Carlo Padoàn, supported by the President of the EIB, Werner Hoyer.
Without totally contradicting the positions of these countries, several Central and Eastern European states asked how it could be prevented that the EFSI benefits only the countries which are seen as a safer bet, with more financial resources and an efficient administrative capacity. Although a prior division of the projects on a geographical or sectorial basis is not the answer, there is a fundamental question that needs answering: “how can we ensure that the EU as a whole benefits from the instrument?”, asked Hungary. Slovenia and Slovakia also called for a “reasonable” geographical distribution of the projects, but without laying down quotas and excluding any political intervention.
The countries which enjoy considerable support under the structural funds warned of the risk that financing already pledged under the cohesion policy will be redirected into the 'Juncker' plan.
The other issues raised included the opportunity for the states to make a direct contribution to the EFSI and the accounting treatment of these contributions with regard to the Stability Pact. In order to avoid eroding the EU budget (uncertainty surrounding the envelope for the Connecting Europe Facility was raised), the capital of the EFSI fund must be increased, said Poland. It is “essential” that the member states contribute directly to the fund, the country believes, going on to argue that “if you put taxpayers' money in, you should get high-level political control” over the tool you are funding.
A number of countries, such as Germany, Spain and Sweden, wanted to know which projects the European Commission may launch to remove the barriers to the completion of the single market.
The other subjects discussed during the talks include: - whether there should be a golden rule set in place giving the European institutions a right of veto on the fund's steering committee; - the treatment of public contributions (directly to the EFSI or in the funding of specific projects) in terms of the Stability and Growth Pact and the European rules on state aid; - the participation of sovereign funds in the capital of the EFSI; - the financial and human resources the fund will need to carry out the Project selection; - the principle whereby the EFSI will support only risky projects which would not secure the funding needed to see the light of day; - the rating of the EFSI.
On behalf of the Latvian Presidency of the Council of the EU, the minister Janis Reirs reiterated his hopes that the member states will reach a political agreement in principle at the March Ecofin Council. (MB)