On the evening of Tuesday 12 September, the representatives of the European Parliament and of the Council of the EU reached a political agreement on the legislative proposal aiming to double the duration and firepower of the 'Juncker' investment plan, a year after it was proposed by the President of the Commission in his 2016 State of the Union speech.
What sets this investment plan apart is the fact that rather than directly subsidising projects, the Community budget is used to provide a public financial guarantee based on the EU budget and aiming to absorb any losses made by the project owners.
The agreement in principle reached on Tuesday is based largely on a compromise on the financing terms for the increase - from €16 to €26 billion - of this public guarantee, provided by the European Fund for Strategic Investments (EFSI), the financial arm of the 'Juncker' plan, to projects selected by the EIB.
The sum of €1.1 billion will have to be found in the perimeter of the current multi-annual financial framework in order to finance up to €500 billion in new investments (€630 billion up to 2022).
Although the Parliament did not want any more funding to be taken from existing Community programmes, it has agreed for €275 million to be taken from the Connecting Europe Facility (CEF) and €25 million from the Marguerite energy and climate fund, sparing the 'Horizon 2020' framework programme for research. Member states in turn agreed to allow €125 million in financial flows (loan repayments, interest and capital income, etc.) from the CEF to feed into the EFSI guarantee. In another first, income generated by the EFSI will contribute in the amount of €525 million. Finally, €150 million will be taken from the unused budgetary margins under the ceiling of one or more headings of the multi-annual financial framework 2014-2020.
Welcoming the extremely valuable assistance of the European Commission over the question of financing, a parliamentary source stressed that there was less CEF mobilisation than the €500 million initially called for by the Council and the Commission (see EUROPE 11683).
Governance. Another stumbling block concerned the governance of the steering committee of the EFSI. The MEPs have secured the possibility of appointing an independent expert, who will become the fifth member of this committee, alongside three experts appointed by the Commission and one appointed by the PIB.
However, Parliament's appointee will not, contrary to Parliament's hopes, have voting rights. According to the same parliamentary source, the committee's decisions are made consensually and it votes only as a last resort. What matters more is that the MEPs will now have some weight in the committee's definition of its strategic orientations. Parliament hopes to be able to appoint its expert by the end of this year.
Pricing. On the question of the pricing of the EFSI's financing operations, sufficiently specific language has been agreed upon to call upon the EIB to look into all possible options (reducing interest rates, combinations with other local/national programmes) in order to reduce the financing costs incurred by project owners, particularly in countries in which the capital markets are not functioning optimally or for highly innovative, yet risky projects.
Parliament's co-rapporteur on this dossier, Udo Bullmann (S&D, Germany) stressed that it will now be easier for regional/national development banks to get involved in the framework of the 'Juncker' investment plan. He added that the projects supported by the EFSI will be chosen more transparently and will be more directed towards future-facing investments, in particular to tackle climate disruption.
The Parliament/Council agreement has still to be confirmed at a forthcoming inter-institutional negotiation session to be held early next month, so that Parliament can approve it at the 2nd October plenary. (Original version in French by Mathieu Bion)