Brussels, 23/02/2015 (Agence Europe) - The European Investment Bank (EIB) believes that the hoped-for leverage effect of the European Fund for Strategic Investments (EFSI), to be launched in the framework of the Juncker investment plan, is achievable.
Under the legislative proposal on the table, the EFSI, to be set up under the aegis of the EIB, will be armed with €21 billion in guarantees (€16 billion from the EU budget and €5 billion from the EIB). The stated aim is to draw down €315 billion in private investments over three years, or a multiplying coefficient of 15 (see EUROPE 11255). Its detractors feel that the leverage effect of 1: 15 is unrealistic, but it is in fact “more conservative” than the 1: 18 we achieved with the EIB's recent capital increase, its president, Werner Hoyer, said on Monday 23 February, when presenting the 2014 activity report of the institution. Following the capital increase of €10 billion in 2012, “we will reach our goal of €180 billion of additional investment across Europe during March 2015, around nine months earlier than anticipated”, the German former Liberal minister added.
Hoyer went on to say that the “main challenge” the bank will face will be to carry out parallel due diligence procedures on the projects it will support whilst providing pre-financing quickly, before the EFSI is up and running, at best in the summer or, at the latest, in the autumn. He also described the initiative of the European investment plan as a “paradigm shift” in the use of the EU budget, bringing about a gradual move away from funding in the form of non-reimbursable grants and subsidies in favour of loans and guarantees, which are likely to mobilise private capital.
In 2014, the EIB signed off financing of €77 billion in support of investments, €69 billion of which was in the EU. Support to SMEs is the EIB's top area of support, at €25.5 billion, corresponding to “the highest amount ever for the EU bank”, Hoyer announced, advancing the figure of “3.9 million jobs” created and preserved thanks to support impacting upon 290,000 businesses. Geographically, the largest volumes loaned benefited Spain (€11.9 billion), Italy (€10.9 billion), France (€8.2 billion), Germany (€7.7 billion) and Greece (€1.6 billion) and Portugal (€1.3 billion). Within the neighbourhood of the EU, the EIB is once again present in Ukraine to the tune of €940 million, following a break connected to repression by the former government of the movement which took place at Kiev's Maïdan Square, amongst other places. (Mathieu Bion)