Brussels, 12/03/2015 (Agence Europe) - On Thursday 12 March, the European Parliament's Economic and Monetary Affairs Committee and Budgets Committee unveiled a draft joint report on the creation of the European Fund for Strategic Investment (EFSI) that is to be set up under the Juncker Plan.
MEPs are planning to play a great role in determining how cash from the European budget will be mobilised to back the launch of projects that would never come on stream without money from the new fund established under the aegis of the European Investment Bank (EIB).
According to the European Commission's proposals, the EFSI would have a budget of €21 billion (€16 bn from the EU budget and €5 bn from the EIB) and this money would serve as a guarantee for any initial losses made by selected projects. The guarantee would be fully mobilised from the beginning to generate the greatest leverage effect. The Council agrees with this approach (see EUROPE 11271).
MEPs, however, say that the guarantee from the EU budget must not have a negative impact on the financing of the Horizon 2020 research programme or on infrastructure projects planned under the Connecting Europe mechanism. In a press release, Eider Gardiazabal (S&D, Spain) said that in order to cover the risks connected with the European guarantee a special fund should be set up from a drip-feed from the EU budget and the mobilisation of money would be authorised on a gradual basis by the EP and the Council as part of the annual budget procedures. She thinks it not necessary to mobilise all of the guarantee from the EU budget at the beginning as one could use the €500 million budget flexibility instrument that wasn't used in 2014, explains an EP source. This marks a major departure from the Commission's line, going by Commission president Jean-Claude Juncker's speech at the EP hemicycle on Wednesday, explained the source.
Commenting on the selection of projects, MEPs are very keen on additionality. Udo Bullmann (S&D, Germany) said that the EFSI should target projects with the highest risk profile and only projects that wouldn't be able to find finance from the market or other sources should be eligible under the Juncker Plan. The social democrats give examples of projects to increase energy efficiency, which are more expensive in the short-term, but become profitable in the long-term.
Finally, the EP wants the managers of the future EFSI to account to the EP for the fund's work once every six months and for them to attend public hearings. It wants the right to scrutinise the selection of members of the EFSI's investment committee, which will ensure that selected projects meet the criteria laid down by the EFSI's piloting committee. (Mathieu Bion)