Brussels, 12/05/2015 (Agence Europe) - On Tuesday 12 May, the Ecofin Council went no further than to reiterate its position on the details for building the guarantee for the European Fund for Strategic Investments (EFSI), the financial arm of the Juncker investment plan.
The finance ministers recognise the fact that talks with the European Parliament on the 'financing' plank of the EFSI have been tough, but there was no question, on Tuesday, of making any changes to the negotiating mandate conferred upon the Latvian Presidency of the Council.
“It is extremely important that the sources of funding (for the EFSI) are clearly identified”, said the Latvian finance minister, Janis Reirs. Germany's Wolfgang Schäuble said that “the EFSI doesn't make any sense if its guarantee is not permanent”, and that this should be “laid down in advance and not be subject to annual decisions”. Speaking along similar lines, Poland, the UK and Sweden argued for the member states to stick to the compromise hammered out by the Ecofin Council of early March (see EUROPE 11271). The European Commission is on their wavelength. “The EFSI will be a strong as its guarantee. This is what will allow the European Investment Bank to focus on riskier viable projects”, said the Commissioner for Growth, Jyrki Katainen. Only the Netherlands argued that the European Parliament should have a say on budgetary control.
The Council and the Parliament, which are co-legislators on this dossier, clash over the details for the constitution of the public guarantee (€16 billion) from the EU budget, which will form the foundation stone of the EFSI. The member states, which are in favour of the Commission's proposal, want to set this guarantee in place all at once when the fund comes into being in the autumn, whilst the EP favours annual decisions in the framework of the traditional budgetary procedure (see EUROPE 11312 and 11298). The states believe that it is enough to take two billion euros from the budgetary reserves - while the EP is calling for eight billion - and they agree that funds should be taken from the 'Horizon 2020' research programme and the Connecting Europe Facility, which the EP feels should be strictly a last resort.
Co-financing, state aid? Speaking on behalf of the EIB, which will oversee the EFSI fund, Germany's Werner Hoyer raised the issue of the treatment of the national co-financing of the projects supported in the framework of the 'Juncker' plan from the point of view of the European state aid rules. “Neither the EIB's own resources nor the operations of the EFSI should constitute state aid. There will not be any results if we cannot agree on this issue”, he warned. The Italian Minister, Pier Carlo Padoan, expressed hopes that the answer to this question will not lead to a “blacklist” of projects being set up in advance. Katainen said that he was confident that a solution would be found.
Hoyer also opposed any additional legislative process aiming to agree on investment guidelines for the EFSI, as called for by the EP by means of a delegated act. He also called for the 'investment committee' of the fund to be renamed 'guarantee committee', as the EFSI will only decide to offer a guarantee to projects selected by the EIB. Luxembourg and Sweden are happy to change the name of the committee.
The member states' aim is to conclude the inter-institutional negotiations by the end of May, with a further trialogue meeting scheduled for Wednesday 13 May.
First financial operation carried out under the Juncker plan. The European Investment Fund (EIF), which will be made up of the EIB group specialising in venture financing of SMEs and innovation, and the French public investment bank (Bpifrance) on Tuesday signed a financial agreement to increase loans to innovative French SMEs and midcaps, through the guarantee funded by the European budget under the EFSI.
Bpifrance will therefore be in a position, by the middle of this month, to fund innovative French businesses for total amount of €420 million over two years, by means of two specific tools: - the 'innovation' loan, with an envelope of €320 million and 50% guaranteed by the EIF, will facilitate the industrial launch of innovations (up to €5 million per dossier); - the 'start-up investment' loan, with a financing capacity of €100 million and a 40% EIF guarantee, will strengthen the financial structure of the fundraising activities of young businesses (up to €500,000 per dossier).
The EIF states that this operation will allow it to speed up the deployment of the resources of the InnovFin initiative of the 'Horizon 2020' framework research programme, by offering better financing conditions. (Mathieu Bion)