Debate: is €315 billion investment plan for Europe delivering? 

 
 

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Jean-Claude Juncker: is his investment plan for Europe working? 

MEPs debated on Wednesday morning whether the EU's €315 billion investment plan to fuel Europe's economic recovery by mobilising public and private investment was delivering. According to the European Commission, the first year of the European Fund for Strategic Investments (EFSI) has been promising, but MEPs had mixed reactions. Read more about the plan and the plenary debate.

Plenary debate


MEPs debated the investment plan's first in plenary on 8 June. While some criticised its effectiveness, others called for patience to allow it to reach its full potential. S&D and EPP - the two largest political groups - were largely supportive of prolonging the investment plan. Italian S&D member Gianni Pittella said it was intended as a serious and specific response to the economic crisis, while Austrian EPP member Othmar Karas justified it not having reached its targets yet: "It is not a sprint, it is a marathon, and so we have to continue in the same way."


Smaller political groups criticised the plan, focussing mainly on the projects receiving investment. Czech ALDE member  Pavel Telička pointed out similarities to other programmes and added that he was not "sure that we are really meeting the objective of [generating] added value".


Regional disparities constituted a major issue for both GUE/NGL and the Greens, with their representatives saying that the plan favours already rich and developed regions, as well as multinational corporations. "The plan should focus on countries that lack investments and investment capacity," said Belgian Greens/EFA member Philippe Lamberts. "Germany has all the capacity in the world for investments."


How the investment plan operates


The aim of EFSI, run by the European Investment Bank (EIB), is to provide public support for projects that are economically viable, but would not otherwise happen because private investors are hesitant to finance them due to the uncertain economic situation and the higher risk involved. EFSI assumes part of that risk, thus encouraging private investors to get on board.

 

The fund includes a €16 billion guarantee from the EU and a further €5 billion from the EIB. This would allow the EIB to issue bonds for three times this amount and use the cash to co-finance projects alongside private investors so that every euro spent by the investment fund will attract an additional €15 in investment from companies and public authorities, leading to an overall investment of €315 billion.


EFSI focuses on large infrastructure and innovation projects as well as on financing for small and medium-sized enterprises by providing guarantees to banks.


The  regulation setting up EFSI was approved by MEPs on 24 June 2015.


Results so far


In total 64 projects have been approved for €9.3 worth of EFSI financing. In addition 185 financing agreements for small and medium-sized enterprises have been approved with banks. More than 140,000 firms will benefit from the €3.5 billion in approved EFSI funding. The total investment from these operations is expected to reach €100 billion.


Energy, transport, digital project and research and development account for three quarters of all approved projects so far. Most of the approved project have been in large EU countries, namely in France, Germany, Italy, Spain and the UK.


Coming up


The European Commission announced on 1 June that it intends to extend EFSI beyond the three-year duration that originally had been agreed. It aims to offer additional support for small and medium-sized enterprises and further develop advisory services to those seeking funding to prepare projects.


On the same day the European Investment Project Portal was launched to help bring together projects and investors. The Commission also wants to introduce similar models of EU financing in countries outside the EU.



 


Commissioner Jyrki Katainen during the debate in plenary