Brussels, 01/06/2016 (Agence Europe) - In the autumn, the European Commission is to present a legislative programme aiming to continue the experiment of the 'Juncker' plan, which is designed to attract more than €300 billion in additional private investments, after 2018, as the project has been deemed positive after a year of its existence.
“We are going to present a proposal” aiming to prolong the EU investment plan “beyond the initial three-year period”, the Commissioner for Growth and Investment, Jyrki Katainen, announced on Wednesday 1 June. He said that it will not be necessary to use a legislative procedure identical to the one that brought in the European Fund for Strategic Investments (EFSI), the financial arm of the 'Juncker' plan, with the adoption of Regulation 2015/1017.
This fund provides a public guarantee of €21 billion (€16 billion from the Community budget and €5 billion from the EIB), which will absorb the first losses made by projects selected by the EIB and supported in the framework of the investment plan (see EUROPE 11364 and 11323). The legislative skirmishes between the European Parliament and the Council of the EU were over the details for constituting this public guarantee, with, for instance, funds taken from European programmes such as Horizon 2020 in the research sector and the Connecting Europe Facility.
In a communication adopted on the same day, the Commission states that in its proposal to extend the 'Juncker' plan, it will take account of the “scarcity of budgetary resources”. “I am relatively confident that it will not be necessary to reopen the multi-annual financial framework”, the Commissioner stressed, adding that the member states would not be called upon to make a further financial contribution. So far, nine member states have made a voluntary contribution to the Juncker plan via their national investment banks: the United Kingdom (€8.6 billion), Poland, Germany, France and Italy (€8 billion each), Spain (€1.5 billion), Slovakia (€400 million), Bulgaria (€100 million) and Luxembourg (€80 million).
The European Council must now assess, possibly as early as at the June summit, the Commission's request to prolong the Juncker investment plan.
On the same day, the Commission launched an online portal aiming to increase the visibility of projects supported by the EFSI and the search for funding, in response to a request made by potential investors from Europe and third countries.
Katainen gave a positive overview of the first year of this three-year plan, which aims to generate €315 billion in new investments. In just a year, 64 projects have been supported by the EFSI to the tune of €9.3 billion and 185 agreements supported at a level of €3.5 billion by the EFSI have been entered into by the EIB group with SMEs. These operations, across 26 member states, are expected to stimulate more than €100 billion of investments.
An innovative financing tool. The Commissioner stressed the capacity of the EFSI to attract more private investments than initially anticipated: every euro provided in the form of a public guarantee to a specific project will raise €23 in private investments - considerably more than the €16 initially estimated. The European budget is now used not simply as co-financing, but as a tool to leverage more resources from private sources, to the benefit of the economy. On the basis of this experience, the Commission will consider whether to develop similar tools to stimulate investments in developing countries.
However, the Commissioner stressed, the Juncker plan does not aim to replace the efforts of the member states. These must continue to cleanse their public finances and to carry out structural reforms, taking inspiration from the socio-economic policy recommendations sent to them in May by the Commission (see EUROPE 11553). (Original version in French by Mathieu Bion)