By suggesting changes to the InvestEU programme, the successor to the ‘Juncker’ post-2020 investment plan, the European Commission wants to encourage private investment in companies active in strategic sectors of activity for the European Union and which, weakened by the Covid-19 pandemic, could attract predatory investors from non-Member States.
Having already been the subject of an Interinstitutional Agreement (see EUROPE 12239/13), the programme integrates fourteen existing financial instruments. It foresees the creation of the InvestEU Fund which will provide a public guarantee based on the EU budget to attract private investment to finance risky investment projects.
Four investment windows were initially planned: - sustainable infrastructure; - research, innovation and digitisation; - SMEs; - social sector and skills.
Integrated into the revised proposal for the Multiannual Financial Framework 2021-2027, the proposal amending the InvestEU programme suggests the creation of a fifth window focusing on strategic investment in the EU. Strengthening European value chains is of particular importance in a post-Coronavirus pandemic situation, as some Member States do not have the budgetary room for manoeuvre to act and many projects have a cross-border dimension.
The time has come to be “more resilient and sovereign”, said Internal Market Commissioner Thierry Breton. He cited the example of a European company - a large group or a start-up - looking for capital. In order to avoid that this company calls upon the capital of an investor who would not meet the criteria of sovereignty, we are giving ourselves the means to intervene, in equity and in loans, he said, evoking, without naming it, the case of the German laboratory CureVac, coveted by investors from across the Atlantic.
Investments under this new policy window will be available to companies established in a Member State and active in the following strategic sectors: - the provision of critical health care; - critical infrastructures, physical or virtual, in energy, transport, digital technologies (5G, payments), aerospace, defence, communications, education; - key technologies enabling breakthrough innovations in the environmental and digital fields, including artificial intelligence, robotics, microprocessors, cybersecurity, renewable energies, energy storage, clean transport, circular economy, biomedicine, nanotechnologies, pharmaceutical industry, information and communication technologies, security.
The short-term investment deficit is “well over €1 trillion a year”, said Economics Commissioner Paolo Gentiloni. Over the period 2020-2021, the fall in investment due to the crisis is estimated at €846 billion, the investment needed to correct the shortcomings that the pandemic has highlighted is €20 billion per year and the investment needs for environmental and digital transition is estimated at around €600 million.
The proposal amending InvestEU aims at filling part of this investment gap. The total public guarantee of the InvestEU Fund would thus increase from €38 billion to €75 billion (current prices) and would be broken down as follows: - 20 billion for sustainable infrastructure window; - 10.2 billion for research, innovation and digitisation window; - 10.2 billion for the 'SME' window; - 3.6 billion for the 'social sector and skills' window; - 31.2 billion for the 'strategic investment' window.
“With €38 billion in guarantees, we were estimating to mobilise €650 billion. With €75 billion of guarantees, our estimate is around €1 trillion. As you can see, it is a more conservative estimate, with a more cautious multiplier”, Gentiloni said.
See the proposed regulation: https://bit.ly/3ewBzF7 and its annex: https://bit.ly/3di2oNc (Original version in French by Mathieu Bion)