Brussels, 10/03/2015 (Agence Europe) - On Tuesday 10 March, the Ecofin Council reached a political agreement on the proposed regulation instituting the European Fund for Strategic Investments (EFSI), which is designed to draw down €315 billion in private investment over three years (see EUROPE 11270 and 11269).
The Latvian finance minister, Janis Reirs, who was warmly congratulated on having been able to secure this agreement in just six weeks, said that he hoped to start talks very soon with the European Parliament, which is to present its draft report on Thursday 12 March (see other article), with a view to a definitive political agreement before the summer.
The financial component of the Juncker plan, the EFSI will stand guarantor to absorb the first losses of the riskier projects selected on the basis of their own merits. The member states have not changed the envelope (€16 billion from the EU budget and €5 billion from the EIB) or the provenance of the money to come from the European budget. “Reallocating funds of the EU budget is never easy”, Reirs said. On this point, the United Kingdom and Sweden stressed that the funding of the Juncker plan must under no circumstances lead to an increase in the EU's budget.
During the public debate, Poland, Luxembourg and Portugal asked the Commission about the treatment funding for projects supported by the EFSI. The Commissioner for investment, Jyrki Katainen, promised that the Commission's analysis would take no more than a month, whereas the normal procedure takes up to a year. “The procedure will be far less cumbersome than it is today”, he said.
The governance of the EFSI will be the responsibility of the steering committee, which will consist solely of the Commission and the EIB, and the investment committee responsible for ensuring that the projects selected fulfil the criteria decided upon by the steering committee. According to the President of the EIB, Werner Hoyer, the investment committee should be called the 'guarantee committee', because it will not be selecting the projects, but ensuring that the guarantees granted are put to good use. Belgium, Lithuania, Sweden and Malta supported this approach.
Italy pledges €8 billion. On Tuesday, Italy announced that it would put €8 billion into the co-funding of projects supported by the EFSI via the national promotional bank Cassa Depositi e Prestiti. It is the fourth country to have announced an indirect financial contribution, following Germany (€8 billion via the KfW), France (€8 billion via Caisse des dépôts and Bpi), Spain (€1.5 billion via ICO). Luxembourg is considering a similar move. Initially, the Commission hoped to secure direct contributions to the EFSI by promising that these would be neutral under the Stability and Growth Pact. This neutrality will remain valid for the contributions of the national public promotional banks, but only for countries with a deficit below 3% of GDP (preventative plank of the Pact). When asked about the states' preference to keep some level of control over the use of the money allocated, Katainen said that there was “no great difference” between the two different options of participating in the Juncker plan, because it is firstly private investors who will apply for the support of the EFSI. The fact remains that the national promotional banks will retain their entire decision-making autonomy in choosing the projects they support.
Several ministers stressed the importance of setting up thematic or regional investment platforms, involving local players. Poland, Croatia, Romania and the Czech Republic made a joint declaration stressing the importance of decentralising the investment platforms, in order to bring the technical assistance of the EIB closer to the projects. (Mathieu Bion)