The new Vice-President of the European Investment Bank, Lilyana Pavlova, told MEPs on the European Parliament’s Committee on Regional Development (REGI) on Monday 20 January that more flexibility in European fiscal rules would be needed to facilitate public investment to meet new climate priorities.
Asked by Pedro Marques (S&D, Portugal) about the need to give more room for manoeuvre for public investment to accompany the transition, the EIB representative seemed to agree. “Yes, I do believe that now we will need to have more public investment, and yes, more flexibility is needed in fiscal rules”, she said. Otherwise, she said, it would be very difficult “for national governments to have more public investment if they have to be very strict with fiscal rules”. However, it must not be a blank cheque and must not go to the other extreme by giving too much flexibility, according to the Bulgarian.
Responding to Andrey Novakov (EPP, Bulgaria), who expressed concern that all funding was being diverted to energy transition projects at the expense of territorial convergence, the EIB representative sought to be reassuring. She explained that the target of 50% of loans dedicated to climate finance (see EUROPE 12403/4) will be calculated on the total lending at the end of the next budget cycle in 7 years. This means that the balance will occur at the end, not within each project. Thus, the “green element” could vary greatly from one project to another, citing proportions ranging from 2% to 60% “depending of the needs”. (Original version in French by Pascal Hansens)