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Procedure : 2011/0301(COD)
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Document selected : A7-0150/2012

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PV 04/07/2012 - 11
CRE 04/07/2012 - 11

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PV 05/07/2012 - 13.3
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Verbatim report of proceedings
Wednesday, 4 July 2012 - Strasbourg OJ edition

11. Financial aid in the field of the trans-European transport and energy networks (debate)
Video of the speeches

  President. − The next item is the report (A7-0150/2012) by Göran Färm, on behalf of the Committee on Budgets, on the proposal for a regulation of the European Parliament and of the Council amending Decision No 1639/2006/EC establishing a Competitiveness and Innovation Framework Programme (2007-2013) and Regulation (EC) No 680/2007 laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks (COM(2011)0659 – C7-0372/2011 – 2011/0301(COD)).

I would like to welcome Mr Werner Hoyer, President of the European Investment Bank, and Mr Mavroyiannis, who I think is making his first appearance before us for the Cyprus Presidency.


  Göran Färm, rapporteur.(SV) Mr President, ladies and gentlemen, this title relating to investments in trans-European networks and so on actually conceals a very interesting report on project bonds. The title should perhaps have reflected this, but it does not really do that.

Europe’s economic future is not just about measures to deal with the acute crisis. It is just as much about boosting the sustainable development of the economy and jobs in the long term and, above all, increasing those investments that will promote growth – both private and public.

This is where the role of the EU is crucial. In order to bring together the different parts of Europe and to exploit the potential inherent in the fact that we, in fact, comprise 500 million people in a common internal market, it is necessary for us to be able to make strategic investments – in transport, in a modern infrastructure, in the energy sector, in the digital sector, and so on. This is absolutely crucial in order for us to succeed in our goals of smart and sustainable growth for everyone.

The economic crisis is not merely a consequence of the collapse in the banking and financial sector; it is also a result of the fact that, for a long time, the level of European investments has been inadequate. The need for investments is therefore enormous now. In the transport, energy and IT sectors, the Commission estimates that there is a need for EUR 1 500 billion up to 2020. That is an enormous amount of money that the EU cannot mobilise on its own. Therefore, the majority of it will, of course, be financed by the private sector, but also by national, regional and local authorities.

However, with the current tight restrictions on public budgets and the increased capital adequacy requirements for banks and so on., we need to find new ways to move forward. One of these ways is the development of innovative financial instruments which, with a certain amount of budgetary support from the EU, should be able to attract additional capital.

Project bonds are just such an instrument. The proposal involves enabling project companies, by means of loans from the European Investment Bank, guaranteed by the EU budget, to issue bonds which will then be more secure and more attractive on the market. The EU’s contribution should be able to raise the credit rating of these projects, which will make them something that pension funds, for example, would be interested in investing in. It is important to emphasise, however, that these are private bonds from project companies and not public EU bonds.

The Commission’s proposal, which is supported by the Committee on Budgets, involves us redistributing EUR 230 million within the EU budget for the project bonds for 2012-2013. That is not a great deal of money, but the Commission is counting on this money being able to mobilise perhaps 15 to 20 times that sum from other players. Then it becomes significant. That portion of the contribution is capped to the guaranteed amount that is set aside in the budget. There will therefore be no increase in the EU’s expenditure. If all goes well, the costs will be zero, but we will be helping to boost growth in Europe.

We must remember, however, that project bonds are just one piece in this investment puzzle in which they need to be evaluated. My hope is that it will be possible to develop them further along the lines suggested in recent weeks by the President of the Commission, Mr Barroso, and also mentioned at the EU summit and the G20, for example.

I would also like to draw attention to other ideas. I think that, in our analyses and evaluations, we ought to examine whether, by improving this proposal, we can reach new types of investors. Can we reach small and medium-sized projects by means of project portfolios, for example? Can we help to create a more liquid bond market in Europe? Could we perhaps even give some thought to the question of so-called Delors bonds – European project bonds guaranteed by the EU budget? I think at the very least we need to discuss this matter.

Finally, I would like to say a big thank you to everyone who has helped to chisel out this important solution: my colleagues in the Committee on Budgets, in particular the shadow rapporteurs, the European Commission, the European Investment Bank and, last but not least, the Danish Presidency. We hope now that the Cyprus Presidency can finally bring this matter to a successful conclusion.


  Andreas Mavroyiannis, President-in-Office of the Council. Mr President, I very much welcome the opportunity to take part in this debate and I look forward to the vote on this issue tomorrow.

It is particularly encouraging that the proposal for a pilot phase of the project bond initiative has been brought to a successful and timely conclusion. In this regard I am very pleased to acknowledge that this was fully taken into account by the European Council in its conclusions last week. Stimulating investment in infrastructure is a key element in supporting growth and creating jobs.

At a time when national budgets are under considerable pressure, it is essential to look for new and innovative ways to boost economic growth throughout the Union. Access to finance has become more difficult in the wake of the financial crisis. In the current challenging economic environment, we need to ensure that long-term investment in the fields of transport, energy and information technology can be maintained.

The project bond initiative is designed to help attract and facilitate private financing of priority projects. The European Union contribution to the project bond instrument should help leverage large volumes of investment. If we can achieve high multiplier effects, initiatives such as the Project Bond Instrument will help ensure that scarce budgetary resources are used as effectively as possible. Provided that the experience of the project phase is positive, the volume of such financial instruments could be developed further in the future.

The agreement reached with Parliament is therefore particularly welcome. It specifically addresses several elements that are important to the Council, including the need to launch the initiative as soon as possible. It also provides for appropriate reporting during the critical first phase and for an independent evaluation at the end of the pilot phase to allow us to assess the impact and effectiveness of the instrument.

Many of these concerns were shared by Parliament. This helped us make rapid progress, for which I would like to express my thanks to the Danish Presidency for the particularly efficient way in which it conducted the negotiation. Thanks are also due to both Parliament and the Commission for their openness and willingness to secure an agreement as soon as possible. I would, in particular, like to express our gratitude to Göran Färm for the excellent way in which he has handled this important dossier and the constructive manner in which he approached the negotiation.

More than ever, we need to stimulate smart, sustainable and inclusive growth in the EU. A wide range of instruments and policies have to be used in order to achieve this. I am therefore pleased that by working closely with the European Parliament and the Commission we have been able to deliver on the project bond initiative. It will make an important contribution to supporting investment in infrastructure and will thereby help boost economic growth and create jobs. I am sure that is something that all of us will welcome.


  Olli Rehn, Vice-President of the Commission. Mr President, I would like to thank the rapporteur Göran Färm, the co-rapporteurs, Mr Langen and Mr Cancian, and their shadows for their very substantive reports and the many constructive proposals they have made in these reports.

I would also like to thank the European Investment Bank and President Hoyer for excellent cooperation in the preparation of this initiative.

Firstly, allow me to put the project bonds initiative in the broader context of our growth agenda: boosting the lending capacity of the EIB; launching the first phase of project bonds; and redirecting a certain amount of Structural Funds towards supporting in particular small and medium-sized enterprises and young unemployed people.

These important initiatives are finally being decided and implemented. I am glad to see that the initiatives the Commission has long been advocating are now turning into reality.

This is definitely necessary as the European Union, especially the eurozone, finds itself at a decisive juncture, not only in its three-year-old debt crisis but in its thirteen-year-old history. The two are of course closely intertwined.

The short-term symptoms of this crisis have their roots in long-term ailments, both structural and systemic. We need to relieve the short-term pain of market pressure to create breathing space for countries to adopt the game-changing reforms that are essential for long-term gain.

On both fronts we are now moving forward convincingly. Last week’s euro area summit agreed to measures that should finally allow us to break the vicious circle between banks and sovereign debt which has done so much to undermine confidence.

Once a single banking supervisory mechanism is in place the new European stability mechanism will be given the power to recapitalise banks directly without its loans adding to the debt burden of countries already under intensive market pressure.

There is no time to lose. That is why the Commission is already working on its proposal for this single banking supervisory mechanism involving the European Central Bank, together with some other proposals it considers to be an essential element of the future banking union Europe is now committed to put in place. We also count on your support in that regard.

The Commission proposed the Europe 2020 project bonds last October as an effective and efficient way of using the EU budget to leverage private investment.

To test the concept of project bonds and demonstrate to the markets and our citizens that it works, the Commission proposed a pilot phase. This is the proposal before you now. I encourage you to adopt this proposal, in order to support the recovery of the European economy, investment, growth and job creation.


  Werner Hoyer, President of the European Investment Bank. Mr President, it is a great pleasure and honour for me to participate in this debate on project bonds. Allow me first of all to thank Parliament for its support of this initiative, and in particular the rapporteur, Mr Göran Färm, for his constructive and pragmatic approach which has hopefully helped to reach a compromise acceptable to all.

As we all know, there will be huge investment needs all over Europe in the coming years, so the test phase of the project bond initiative comes not a moment too soon. We are faced with an urgent need to restart our economies, to stop the rise in unemployment, in order to preserve the EU’s role and position in the world, and the project bond initiative will be one more element among others in our toolbox to raise private money on the financial markets. It is not an alternative to the instruments in our toolbox; it is an addition to them.

At last week’s summit, leaders committed to an ambitious Growth and Jobs Compact. Long-term investment will be a crucial component of this plan. Importantly for the taxpayer, the project bond initiative does not impose an additional burden on domestic budgets, sovereign debt or contingent liabilities. On the contrary, it relies on a small EU budget contribution redirected from existing programmes, coupled with an EIB guarantee or loan. Together, these two elements will improve the quality of debt raised by project promoters, allow institutional investors to buy this debt, and support considerable investment throughout Europe.

The multiplier effect can be significant. With a EUR 230 million guarantee from the EU budget and an EIB contribution, we will be able to support up to EUR 4.3 billion of investment in this pilot phase. This is the rationale for using public money as risk capital in times of crisis. A careful scaling of the EU guarantee and EIB loan element will allow for a more efficient use of EU budgetary resources. The project bond initiative is therefore another fine example of synergy between the EIB and the Commission and I thank Commissioner Rehn for his excellent cooperation.

As the EIB has traditionally worked on three pillars – lending, blending and advising – we are optimistic that we can offer our help and experience to make this pilot phase a success, and it must become a success. Building on its experience and developing joint instruments, the EIB has been working on identifying projects suitable for the start-up period. The first pilot projects will most likely be situated in some of the more advanced project-financed markets of the EU, and will focus on a handful of clearly bankable deals where relatively small amounts of public money can help underpin relatively large volumes of investment. The clear objective, however, is to support access to long-term finance for infrastructure throughout Europe.

Investment in energy networks to promote energy security, in digital access, and in sustainable transfer infrastructure is crucial for the success of the Europe 2020 strategy and the continent’s long-term growth prospects. I hope that project bonds will increase appetite for private-sector financing of vital projects.


  Werner Langen, rapporteur for the opinion of the Committee on Industry, Research and Energy. – (DE) Mr President, I have the opinion of the Committee on Industry, Research and Energy to present to you. The Industry Committee unanimously adopted 28 amendments. The Committee on Budgets accepted most of them. For us it was important to put reporting obligations in place and to underline the seriousness of this pilot phase: an independent final evaluation, an interim report, the fact that is being carried out under the full responsibility of the European Investment Bank (EIB), including the technical expertise, and does not merely represent an extended arm of the Commission, even though budget resources are being made available.

We want to mobilise private capital for large infrastructure projects, for the provision of broadband networks, for energy networks – for all of these challenges. My request to you, President Hoyer, is that when the selection phase takes place, the EIB does not allow itself to be influenced by anyone. We cannot have a situation where, during the pilot phase, only simple projects are carried out and then afterwards the model and the result are transferred to difficult projects where failure could potentially be waiting for us. Thus, honest assessment, selection and evaluation – that is what the Industry Committee is concerned about, because we support project bonds in general as a way of mobilising private capital.


  Antonio Cancian, rapporteur for the opinion of the Committee on Transport and Tourism.(IT) Mr President, Commissioner, ladies and gentlemen, of course I am absolutely in favour of this pilot phase for project bonds, because the principle of using European resources while utilising the European Investment Bank’s experience to create this leverage effect to carry out quality projects of European interest, is currently urgent and valid. The budget for this pilot project does not work. EUR 230 million is truly too little, and in particular the EUR 10 million for the energy sector and the EUR 20 million for telecommunications appear to be a token allocation. This instrument needs to be allocated a serious budget in future.

What is really missing? We have to have the courage to guide the economic recovery from here, from the European Union. We are lacking the courage to implement an initiative for the direct issuance of bonds by the Union in a public-private partnership (PPP) system, in order to participate directly in investments in infrastructure which we consider to be a priority and to pull the economy out of the quagmire it is in. I am not referring to the past, to debt mutualisation and so on, but to future development, and hence we must start again together. That is the only way to immediate growth, to create jobs and the competiveness we deserve.


  Dominique Riquet, on behalf of the PPE Group.(FR) Mr President, Commissioner, ladies and gentlemen, first of all, I should like to commend the extremely productive work of Mr Färm on this issue. Thanks to this work and cooperation with the Council under the Danish Presidency and now under the Cypriot Presidency, we can expect this initiative to enter into force this summer.

It should be supported for two main reasons. First of all, this innovative financial instrument is based on a smart use of resources that are known to be limited: the redeployment of existing budget lines, on the one hand, and leverage effects on other investments, on the other. Budgetary stability policies will only bear fruit if they are accompanied by measures for economic recovery. The bonds designed for financing projects (‘project bonds’) are targeted precisely at areas likely to create jobs, namely transport, energy and broadband infrastructures.

I further believe that the text which has emerged from the trilogue and on which we shall vote significantly improves the Commission’s proposals by defining the instrument more precisely, by strengthening the tools for its monitoring, by introducing regulatory changes if uptake is unsuccessful without discouraging the markets and by introducing the possibility of reusing interest and other revenue generated.

Finally, the opportunity to consolidate the trust account of the Loan Guarantee Facility for the trans-European transport network (TEN-T) (LGTT), the current loan guarantee instrument for transport infrastructures, with the ‘project bonds’ account enables better financial management.

Finally, Mr President, let me just say that we may be witnessing the beginning of what could be called a ‘semi-public financial economy’, between Europe, its institutions, and the European Investment Bank (EIB) as such with its expertise. This semi-public financial economy will aim to set up a genuine market for our projects and our tools in the next multiannual financial framework (MFF) as the mechanism for connecting Europe.


  Inés Ayala Sender, on behalf of the S&D Group.(ES) Mr President, it is indeed true that the European public expects something more than bad news from the European Union.

I therefore think that, this afternoon especially, we should congratulate not only the rapporteur, of course, Mr Färm, whose tenacity and intelligence have enabled him to bring us all to an agreement, but also the institutions: the Commission, the Council, Parliament and also the financial entity that is the European Investment Bank, which has so far been appearing and reappearing – a little like the Guadiana river – and which we need to be present.

The presence of that entity is necessary precisely at this time of propping-up of scarce public resources that need to draw on private resources, precisely in order to ensure that infrastructure and this area of communication, connection and mobility of people, goods and services are realised.

This does not only apply to traditional infrastructure but more so to infrastructure that will be innovative, smart and of the future; which will connect us together and also connect Europe to the rest of the world. Above all, it will create employment, development and wealth within Europe because, of course, with other regions growing at a tremendous rate, we need these smart instruments that Europe has been able to utilise on other occasions. We need them right now, in order to draw on our development and continue to be as competitive as we are, leading the way in aspects of engineering, public works, development and communications, as we have been doing to date.

I do of course welcome this proposal and Regulation, and in the two short years that are left, I urge the Commission to give us the best results.

I find that information every six months is also a valid tool for ensuring that Parliament and Europeans commit better to this project and, of course, as co-rapporteur on the Connecting Europe Facility, I warmly welcome the step forward that will be represented by what the Europe of smart infrastructure will become.


  Anne E. Jensen, on behalf of the ALDE Group.(DA) Mr President, on behalf of the Group of the Alliance of Liberals and Democrats for Europe I would also like to say that we support this project and we believe that it is very good that we have got it off the ground and that we will be able to get it up and running quickly. I would also like to thank Mr Färm for his excellent contribution to finding a solution for this pilot project.

In Denmark, where I come from, the idea of project bonds is, in reality, not a particularly strange one, as we have invested in many of our fixed connections – the bridge that links the country together and the bridge with Sweden – with loans taken out on the private market by the undertaking that built the bridge. The loans are subsequently paid back via contributions from the people who use the bridge.

Thus, it is a way of raising capital in order to invest in infrastructure, and we all know very well – and it has been said here many times today – that it will probably be many years before the state purses will, in all seriousness, be able to afford to meet our investment needs.

We have seen this sort of market for bonds used to finance infrastructure in the United States, and we hear from the private sector that, with the work we will be doing over the next 10 years, we will easily be able to get this sort of market for bonds off the ground. In other words, we will therefore perhaps be in a situation one day where it will be something that can in fact manage on its own, almost without any support from the EU budget.

We need to provide support in the first instance, however. We need to borrow the confidence that exists in the European Investment Bank, so that investors in the form of pension funds and insurance companies can have the confidence to invest in serious projects. We need that in order to get this off the ground.

I would also like to say that it is important for us to obtain an agreement on how we follow up on the experience gained in connection with this project, so that we can take this further and have a much greater focus on it in the future.

(The speaker agreed to take a blue-card question under Rule 149(8))


  Hans-Peter Martin (NI), blue-card question. – (DE) Ms Jensen, you spoke about experiences in Denmark. With regard to the project bonds, you said that problems can, of course, arise in connection with the issuing of guarantees. Are you not also concerned that, as a result of the fact that security has to be provided first, ultimately pension funds will once again be able to profit indirectly via the public purse? What would you suggest as a way to truly counter this? Examples could be limiting the issuing of guarantees or appropriate capping.


  Anne E. Jensen (ALDE), blue-card answer.(DA) Clearly pension funds and insurance companies that buy such securities need to weigh up whether there is adequate security for the investors’ money, for pensioners’ money. However, we are in a situation right now where there is a serious latent problem for everyone operating on the financial markets. Not even government bonds are particularly safe at the moment. We also really need to establish the sort of market that can provide a very high level of security and a payment profile that matches the needs of these investors with long-term profiles, so that they can ensure that the money is there when they come to pay out their pensions. At a fundamental level, this is also about the fact that, with these bonds, we can invest in a society that, when Mr Martin and I are older and retire, will actually be a properly functioning one.


  Isabelle Durant, on behalf of the Verts/ALE Group. – (FR) Mr President, it is true, and I am not the first to say so, that the state of the European Union’s public finances is such that we must obviously use every available instrument to promote a number of essential investments at European level, in the areas of transport, energy and broadband. Project bonds are an objective that we are particularly keen to support as they are very useful in this respect.

This is a pilot phase, and that is why I think that we should clearly set the criteria governing the evaluation of this pilot phase.

I should just like to draw everyone’s attention to two points. The first concerns the choice of projects. We have, and I thank the rapporteur, really tried to introduce greater sustainability criteria into the framework for selecting the projects, because not all infrastructure building is necessarily beneficial to the European Union and may indeed increase an ecological debt that we shall have to repay at some future time. We should therefore, in any case, pay close attention to the quality of the projects that we support.

My second point concerns risks. Objectively speaking, there is a financial risk. We have, of course, tried to minimise it in the case of public authorities, but it does exist. In this respect, I think that we should pay very close attention, during the evaluation phrase, to assessing the best ways of minimising financial risk to public finances, while guaranteeing revenues for any private investor who has invested resources in this project.

I truly believe that, while it is good, useful and necessary to launch this initiative, it is equally important to set in advance the criteria by which the pilot phase is to be evaluated, before rolling out the initiative. I think that it is an important instrument, and that it deserves our closest attention, particularly in the initial stages.


  Richard Ashworth, on behalf of the ECR Group. Mr President, I welcome the rapporteur’s proposals, particularly for investments that will help stimulate the European economy, but I want to add a word of caution that it must be investment which adds real value. Things like research and development, cross-border connectivity of energy and transport and broadband are really adding European value, whereas a lot of the previous investment in infrastructure has been of questionable value.

I also agree with the rapporteur’s approach to funding. But I stress that, this being a pilot project, it is strictly time limited and at the end of that period it will be subject to independent analysis. It is important for that analysis to be taken seriously because it is not a rubber-stamp exercise. The outcome must be respected and, in respecting that, the key must be to protect the interests and exposure of the European taxpayer.


  Jacky Hénin, on behalf of the GUE/NGL Group.(FR) Mr President, it is a very good thing for the European Union to take measures to provide our continent with infrastructure in the areas of transport, energy and digital networks. It would be an even better thing still if it led to European public ownership of these infrastructures and if they were to be operated by major European transport, energy and digital network public services, thereby increasing security and respect for public money.

It is time to put an end to a type of competition which, while enabling a minority to levy fair profits, is a source of waste, inefficiency, regional inequalities, corruption, and exorbitant prices paid by users, who have become customers despite themselves.

Did you know that, thanks to your competition dogma, a sizeable proportion of the lorries that travel through Europe do so empty? That more energy is sold than is produced, with the costs that this entails for families and companies?

If Europe wants to enter the 21st century and not end up back in the 19th century, we must say ‘no’ to sterile competition and ‘yes’ to cooperation and complementarity.

The funding system for these essential infrastructures that you are presenting to us today is just another one of those convoluted schemes that lead to crises. In short, we socialise risk and privatise profit to the great delight of the pension funds and other harmful financial funds.

I myself have an innovative solution to offer you which does respond to the general interests of the citizens of Europe: the direct funding of these infrastructures by the European Central Bank, under the same conditions as those for the private banks that are currently being refinanced by the ECB.

This solution would let us partly release the stranglehold that the financial markets have on European democracy.


  Claudio Morganti, on behalf of the EFD Group.(IT) Mr President, ladies and gentlemen, I think the proposal to establish project bonds to finance development of the European infrastructure network is positive. The allocated figure of EUR 230 million is somewhat low in relation to actual needs, but it should be borne in mind that this is an experimental phase, and considering the chronic scarcity of resources I think the result achieved is a good compromise.

With these funds it will be possible to fund around 10 projects at most, but this is a useful exercise to understand whether this instrument can be a driver to attract the necessary investments to improve transport, energy networks and telecommunications in Europe. However, I hope that the projects that will benefit from this new initiative are chosen carefully, and that above all the effectiveness of these proposals is closely scrutinised. We absolutely cannot allow ourselves to invest public money in risky operations with uncertain returns.


  Francisco Sosa Wagner (NI).(ES) Mr President, ladies and gentlemen, all our attention is focused on the banks, and time and again people say that they are the lifeblood of society. That image is probably right, but let us take into account that any body is held up by a backbone and joints. Well, the backbone and joints of the society that we call Europe are its transport networks and energy infrastructure.

It is essential, as is being said this evening in Parliament, that we mobilise private funding and, where appropriate, public funding. This is also an opportunity to promote the issuance of private debt, backed by the European institutions, specifically aimed at achieving these aims fairly, and also open to any investor.

I would congratulate the rapporteurs on their work and also the Commission on its clear impetus behind these projects.


  Salvador Garriga Polledo (PPE).(ES) Mr President, Commissioner, ladies and gentlemen, as well as being a spokesperson on budgets for the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, Göran Färm is a very professional MEP who works very hard on his reports, and the one that we are discussing now is a good example of that.

At a time of very harsh budgetary restrictions, the use of these innovative financial instruments is highly important. In the debates of the Special Committee on Policy Challenges and Budgetary Resources for a Sustainable European Union after 2013 that took place last year, Parliament agreed on the need to introduce these new financial instruments, in order to compensate for the possible insufficiency of the traditional budget. Essential investments in transport, energy and telecommunications need to be financed. These needs are evaluated at EUR 1.5 billion between 2010 and 2020.

Taking into account how difficult it currently is to secure a private investor for large infrastructure projects from which it is difficult to make a profit in the short term, the project bond initiative takes on even greater importance. The Council’s express acknowledgement of the future use of project bonds and their relationship to the Connecting Europe Facility makes this report even more important. It is a fully European project that brings new funding to projects that incorporate high added value for the EU.

What is most important is that the majority of the amendments suggested by the rapporteur have been adopted by the Council in two different trilogues, and that this is going to enable us to reach a swift agreement at first reading so that the project can begin immediately.

Concluding with the subject of evaluation, it is very important that, as a Parliament, we demand that the Commission presents its provisional report in mid-2013 and that therefore, if the market has not positively received project bonds, we will be in a position to improve the project, in order to implement it in the second half of 2013.


  Saïd El Khadraoui (S&D).(NL) Mr President, I would like to start by thanking the rapporteur and all those involved in this dossier. We are discussing something that was often in the news and that was announced far in advance, the famous project bonds. I believe that we need to support these bonds, as they represent a good attempt to also enable more private funds that are present in the economy to give rise to real investment projects that, of course, also directly and indirectly contribute to economic growth. I also fear, a little, that if we want to realise our ambitions in order, for example, to bring about a trans-European transport network, we will need a mix of funding streams, and this should be one of them.

At the same time, we also need to keep modest. We have now made available EUR 230 million with which we will be able to support maybe two or three projects. That is a good thing, and every little helps. However – to cite just one example – if we want to realise the trans-European transport network by 2030, we will need to find at least EUR 500 billion to make that a reality.

This kind of funding instruments must not – and this is also important – be used as an excuse to fail to make any real credit available for investments. We thus need to keep an eye on this to check that, along with this kind of instrument, there is also sufficient credit such as for the Connecting Europe Facility (CEF), so that the authorities at various levels, too, can live up to their responsibility. However, let us give this our backing in every respect.


  Adina-Ioana Vălean (ALDE). - Mr President, I am glad that growth, one of the core concepts we have always defended, has reached the frontline of the debate. Nevertheless, we must bear in mind that growth is created by markets – not by institutions or legislators – so, if we want growth, we should support the market.

If we want to speed up the development of infrastructure in order to complete the internal market and boost competitiveness, we must use our shrunk budgets to attract private finance dedicated to long-term investments. The new mechanisms, like the Connecting Europe Facility, should primarily rely on these financial instruments to develop energy and telecom infrastructure in a stable and transparent framework which will not distort markets and which will attract private investors, rather than crowding them out by creating an uneven competition between public and private money.

Yes, we need project bonds to work and, yes, we need them to be assessed and improved after their pilot phase. What we also need is for our institutions to support the real stakeholders: banks and institutional investors. We need to develop this new asset class which should bypass current uncertainty and debt driven constraints and that will help to complete and expand markets.

Being part of the solution requires leverage for each euro spent by the public sector. For this, the time is gone when we could rely on grants alone.


  Claude Turmes (Verts/ALE).(DE) Mr President, Commissioner, Mr Hoyer, I think environmental criteria are important during this pilot phase because we need to stop creating infrastructure that takes us further away from our climate targets, as well as from our energy targets.

One specific weakness that I can see, for example, is the fact that we do not actually have any large projects to do with renewable energy sources in the pipeline at the moment. Even in connection with the ‘Connecting Europe Facility’, we are only talking about infrastructure and not about renewable energy sources, and it is also not clear how this pilot phase will carry on later. The Danish energy company Dong recently sold a large wind farm to Danish pension funds. This means that there really are opportunities to get the first phase of large renewable energy projects set up by specialists who are able to carry out risk management and then, in a second phase, to hand it over to other investors, thereby creating new opportunities for those who know the business.

I hope that, in the next budget, we in Parliament and the Commission will also make funds available for this from the EU budget.


  Hynek Fajmon (ECR). − (CS) Mr President, the report we are now debating recommends introducing a new financial instrument supporting the use of bonds to fund infrastructure projects.

I am generally sceptical about such initiatives, as they increase the debt burden of states and of the other investors who construct transport, energy and other public infrastructures. These entities are already heavily indebted, and some are even over-indebted, and to help them by facilitating the implementation of public investment through additional debt is not, in my opinion, the right way to go.

I would also like to comment on the amendment tabled in respect of the original text, requiring that newly built transport infrastructure take account of issues related to climate change. I confess I have no idea how this could be achieved. Transport infrastructure has nothing to do with climate change related problems as far as I can see, and an additional, poorly-defined term like this should not be added to the text.


  Hans-Peter Martin (NI).(DE) Mr President, as always when Mr Turmes speaks, his words are very intelligent, and I wish that what he said had much more influence on European policy. I just wanted to follow on from what he said. Of course, these project bonds are sensible, but only if they are set up in a sustainable way and if we establish a political basis to support them. By providing guarantees, we run the risk of providing cover for risks that we have no political control over.

Specific examples include the switch to sustainable energy in Germany: a 3 800 kilometre network would be necessary, but only 100 kilometres of the corresponding transmission networks have been built, as this is also being thwarted by resistance from citizens – and, incidentally, very environmentally minded citizens. We need to think of a political solution to this. One idea might be for us to establish shared trans-European network corridors, not just combining the high-speed routes for railways and broadband networks, but also perhaps constructing the relevant distribution networks above or even alongside motorways. That does require much more extensive planning than has been carried out up to now, but I would at least like to take this opportunity to put it forward as a suggestion.


  Zigmantas Balčytis (S&D). - (LT) First of all, I would like to thank my colleague, rapporteur Göran Färm for doing a really great job, and, of course, the Commission for listening to the European Parliament’s calls for proposals on project bonds, which are important for the development of the European Union’s infrastructure. The Europe 2020 strategy sets ambitious targets, but with the current transport, energy or information technology infrastructure it will be impossible to make any significant progress in the decade ahead. Addressing today’s problems, such as traffic congestion, outdated energy systems, missing transport and energy links and undeveloped information technology infrastructure will require huge investment, which the public sector cannot provide. We therefore have to rely on private sector investment, but the unfavourable economic situation in the European Union and projects that are not commercially viable will not attract the funding we lack. Although a comparatively small amount, EUR 230 million, will be allocated in this pilot phase, we should expect this phase to provide greater guarantees and security for potential investors and to help assess the functioning of the European Union market. The introduction of the bonds is very welcome and it must help move forward and promote the development of crucial infrastructure that provides added value to the whole of the European Union, infrastructure which is vitally important for isolated regions and without which the European Union internal market cannot and will not be able to function effectively.


  Philippe De Backer (ALDE).(NL) Mr President, I think we all know that our European transport network is far from complete, and I believe that is important to continue to invest in these transport networks in the forthcoming period via the trans-European networks and also the connecting Europe facility (CEF). The project bonds, as presented here, form one element of that funding, and an important one at that.

We all know that Member States are finding it harder and harder to fund major infrastructure projects. We also all know that there is now a great deal of dormant capital on the sidelines that makes it very difficult to mobilise capital in order to invest in the real economy. The project bonds could help to direct that private capital into sound infrastructure projects, providing European added value.

The EUR 230 million that is now available is, of course, just a beginning, but it does make it possible to finance a number of smaller projects and, at the same time, also to look for answers to a number of technical issues that still exist for many investors, including for rating agencies, in order to work this way and in order to properly be able to make investments in a subsequent policy period, including via these project bonds. My group thus fully supports this proposal.


  Riikka Manner (ALDE). - (FI) Mr President, Commissioner, as has been said here on many occasions, it is very important that we in Europe invest in a viable infrastructure. It is also especially important for our economic success.

It is very important that, in the future, we are also able to make more use of both private and public funding for these projects, as well as the EU’s various instruments, of course. One potentially major financing element in the future, in addition to this ‘Connecting Europe Facility’ (CEF), will be regional development funds, and in the forthcoming term infrastructure projects are also bound to carry more weight than before in the context of these funds.

It is important that we also take a comprehensive look at Europe when we are developing the infrastructure. At present, the focus is often largely on central Europe, but the needs of northern Europe also need to be taken into account.


Catch-the-eye procedure


  Roberta Angelilli (PPE).(IT) Mr President, ladies and gentlemen, the launch of project bonds is an important first phase of the Growth Pact. This is a pilot project, perhaps accompanied by excessive caution and a budget that is far too symbolic – less than EUR 5 billion for the 27 Member States – but it is still a welcome sign of practicality. It opens the way to new instruments to raise private funds to be used in strategic infrastructure investments, also to make the European economy competitive and to create new jobs.

I agree with those who called for rigour in the assessments, for projects to be of high quality and reliable, and for results to be measurable, but after the first experimental phase let us be open to more ambitious projects, which allow a real and strategic phase of development and growth in Europe.


  Sergio Gaetano Cofferati (S&D).(IT) Mr President, ladies and gentlemen, this morning we have heard how the Cypriot President is relying on the construction of both energy and telecommunications networks, and transport networks, but the construction of such networks requires a great deal of funding. The funds allocated today are not enough!

Building networks is worthwhile if done properly, to give a concrete idea of compatible growth and, moreover, to help this part of the world attract major investments. They are therefore an instrument for sustainable growth on the one hand, and for job creation on the other.

For that reason, I believe the priority is to find the resources to achieve these objectives. Moreover, nobody will invest if they do not see an extraordinary effort, particularly on the part of the Member States and the public authorities. This is our chance and that is our task, which I consider to be crucial for development policies.


  Jan Kozłowski (PPE). - (PL) Mr President, I would like to congratulate Mr Färm on a very interesting report. I agree with the rapporteur that multimodal transport corridors are vital for economic development and economic contact with external partners. However, because of the high cost of energy and transport infrastructure, support for greater private sector involvement and the use of reversible instruments are of fundamental importance in this area. For this reason, the concept of project bonds looks interesting and worth investigating in greater depth. I am convinced that a pilot project for this solution will bring much additional information concerning, in particular, the reaction of the private sector.

I hope that these new investment possibilities will help to reduce disparities between European regions which, in my view, is of key importance for the economic growth and competitiveness of the European Union.


  Silvia-Adriana Ţicău (S&D).(RO) Mr President, the pilot phase of the Europe 2020 project bond initiative should be launched in preparation for the Connecting Europe Facility, as we would like it to take place as quickly as possible. The pilot phase should be funded in 2012 and 2013 by budget redeployment from the current programmes in the transport, energy and telecommunications sectors. Therefore, up to EUR 200 million could be redeployed from the TEN-T budget for this initiative, up to EUR 20 million from the Competitiveness and Innovation Framework Programme budget, and up to EUR 10 million from the TEN-E budget.

The European Investment Bank should request budgetary funds on the basis of a range of projects which the bank deems suitable and feasible. However, it is important for Member States to submit these applications by 31 December 2013 and, only as part of highly complex infrastructure projects, by 31 December 2014. Therefore, now is the time for us to prepare for good absorption in the future multiannual financial framework.


  Jaroslav Paška (EFD). – (SK) Mr President, there is no doubt that the European economy needs an effective stimulus to break through the persistent stagnation. The assumption that innovative forms of financing meaningful trans-European transport and energy network projects will bring about the faster implementation of these projects, technological advances and increased employment opportunities in the EU will only become a reality if the funds used are managed very well.

The testing of new mechanisms in the pilot phase is certainly a manifestation of a certain caution in implementing this idea. And therefore, right from the outset, the European Investment Bank and the European Commission should have been collaborating with independent expert institutes in order to set up, already at that stage, the proposed system at a level that is sustainable and effective in the long run with minimum risks.

In any case, the main objective of the new forms of investment should not be merely to obtain funds, but in particular to implement important investments with proven good returns.


  Elena Băsescu (PPE).(RO) Mr President, there is an urgent need at the moment to boost investment in infrastructure in the transport, energy and information and communications technology sectors. I think that the Europe 2020 project bond initiative will mobilise resources from the private sector on a more consistent basis. This must be done as soon as possible to help the European economic recovery.

The pilot phase is useful because it will familiarise investors with the structure of the bonds and how they work. It will also provide the opportunity to assess the instrument before it is implemented. The contribution from the EU and EIB will make the bonds safer, thereby reducing the risks assumed by investors. In recent years the EIB has granted support to my country to the tune of more than EUR 3.8 billion for infrastructure projects.


(End of the catch-the-eye procedure)


  Werner Hoyer, President of the European Investment Bank. Mr President, honourable Members, I should like to thank you for the broad consensus and support you gave to this initiative and also to our Bank which will play an important role in the implementation of this initiative.

It is going to be a very ambitious project and the work is going to start now. We have to deal with this with diligence and resolve at the same time, and we have to be ready to subject the outcome of all this to an objective test and to scrutiny and evaluation. I can assure you that the Bank is going to be ready to participate in this critical and honest review of what has been achieved within a relatively short period of time.

We do not want to discredit this new instrument; we want it to be a success. That means that we have to play with open cards and with very precise and clear criteria that will be the benchmark for the evaluation of success of this instrument.

One of the advantages of the European Investment Bank is that it is not only a Bank with lots of highly-qualified capital market personnel, but it is also a Bank which can do its work on the basis of deep knowledge and expertise in engineering and science.

This is what is needed here in many cases, because if we want to be loyal to our principles it is necessary to test the submitted projects critically in view of technology and technical viability and also from the financial point of view. This is what the EIB is going to guarantee in this process. Then we will come back and report to you.

(DE) Mr Turmes is, of course, right to say that the financing of energy production is not possible at the moment under the project bond guarantee. This is something that I, too, regret to a certain extent. In this case, we need to talk about whether, in future, the programming of resources from the Structural Funds and other EU funds can be reorganised to make it more straightforward so that we can act more quickly. In many of the activities that we are currently carrying out in Greece, for example, it would be good if we were able to act more quickly. However, that is a matter that Parliament, the Council and the Commission need to get to grips with together in collaboration with the bank. In any case, the bank will continue to remain very active in the area of wind energy in the North Sea and the Baltic Sea and in many other places – in this regard we will not allow ourselves to be outdone by anyone.

I have one last point concerning risk, ladies and gentlemen.

Mr President, under the project bonds initiative, the EIB will guarantee only up to 20% of the senior debt. We will not remove the risk from equity. The private sector that has equity will pay a market premium for credit enhancement. This is, therefore, very important, because credit enhancement is not a 100% guarantee for the private sector.

Private-sector risk remains the best means of ensuring that the projects selected are economically and financially sound. So EIB due diligence and independent decision-taking is going to be a key part of the success story of the project bond initiative.


  Olli Rehn, Vice-President of the Commission. Mr President, honourable Members, I would like to join President Hoyer and thank you for a very substantive and constructive debate. I would also like to thank you for your very strong support for the Europe 2020 project bond initiative, the basic idea of which is to stimulate private investment through public risk-sharing investment by the Commission and the EIB, to be used for large-scale investment in infrastructure.

It is important to get concrete on this once it has been adopted. The Commission and the EIB will sign a cooperation agreement as soon as possible after the final adoption of the proposal by the Council in July. As regards concrete projects, my understanding is that the EIB is already receiving expressions of interest and has started assessing a number of potential projects in the three sectors – transport, energy and communications – in order to start seeing signatures soon for these projects.

Of course we know that the pilot phase has a budget of only EUR 230 million. This means that we must use this pilot phase in order to make the case for increased funding on investment and growth in the next multifinancial framework for communication and transport, for energy, security and green growth. Indeed this pilot phase must pave the way for a reinforced contribution from the EU budget as well for these important objectives. We regard the project bonds as an integral part of the Connecting Europe Facility from 2014 onwards, which is an important example of the focus on growth and investment in the next multifinancial framework.

The commitments made by EU Member States and the Union as a whole to address the current crisis and to mobilise growth and jobs are very substantial. They have to be, because the well-being of every European citizen depends on the well-being of Europe as a whole. In the middle of difficult national debates on the necessary policy measures, it is of crucial importance that we can demonstrate the benefits of Europe in very concrete terms to our citizens and do so as soon as possible. This is a further reason why the project bond initiative plays an important part in our overall European growth agenda.


  Andreas Mavroyiannis, President-in-Office of the Council. Mr President, with full respect to some dissenting voices, I believe that this is one of these rare moments where we have an exceptionally broad consensus on an innovative idea. I would like to thank you all for this very constructive debate.

Some have said that the figure of EUR 230 million is rather low, but, as I said at the outset, this figure is intended to act as a lever for many larger volumes of investment in the future. Several of you have underlined the need to carefully choose the projects, and I very much agree. Some have also said that we need to ensure long-term added-value at the European level. I believe that both the President of the EIB and Commissioner Rehn have provided the necessary reassurances in this regard. I agree also with those who emphasised the importance of the evaluations.

Now, of course, the next steps will be key. Once Parliament and the Council have approved the text, we will be able to launch the implementation of the pilot phase. We want to see projects being financed as soon as possible and to assess how the initiative is received by market participants. It will also be important that the Commission and the EIB maintain close dialogue, both with the European Parliament and the Council at this early stage, and that lessons from the pilot phase are properly taken into account for the second phase.


  Göran Färm, rapporteur. Mr President, colleagues, thank you very much for this enlightening debate. Let me just conclude with a few comments.

First, on the need for the instrument. Insufficient levels of investment are a major problem for Europe. This is a structural rather than temporary problem, and the present crisis has made it much more difficult to deal with and to change the situation. That is why we need new additional instruments.

What kind of projects will be financed? I agree with Mr Hoyer; to begin with the focus will probably be on more developed markets. I warmly thank President Hoyer for pointing out that a wider perspective may be possible in the future, when the instrument will be able to target other things as well. That is also very important.

On criteria, Mr Turmes and some others have raised the idea of having other kinds of projects, such as renewable energy projects. I am quite open to that. Let us have a discussion for the coming multiannual financial framework on a more permanent phase for the financial instruments and project bonds. I am quite open to this idea with regard to the evaluation of this pilot phase.

I would say that the main discussion here has been about the risks. I know that some Member States, including my own, have been reluctant to accept this initiative but I hope that this debate has reduced their worries. We are not taking any unreasonable risks with taxpayers’ money and we really need this additional effort.

Do we socialise risk and privatise profits? I would say that with these guarantees we will be able to mobilise resources which otherwise would stay in the coffers or end up in the speculative markets. It is taxpayers who gain the most from such an approach.

The risk is strictly limited. There are no contingent liabilities. If we are given a choice between using EUR 230 million for grants, which will lead to investments of only EUR 230 million, and using EUR 230 million as an innovative financial instrument which might mobilise billions, then we will see that the way we are taking now is quite good.

I began by thanking colleagues; let me also say a big ‘thank you’ to the Committee on Budgets. The secretariat there has done a fantastic job, and so has my own office.


  President. − The debate is closed.

The vote will take place tomorrow (Thursday, 5 July 2012).

Written statements (Rule 149)


  Sergio Berlato (PPE), in writing.(IT) To make full use of its potential, the European internal market needs an efficient and extensive transport and energy infrastructure network. The report in question focuses on project bonds, designed by the European Commission to attract more private investments from 2014, and, in particular, on the pilot phase in 2012-2013, intended to check that they work and to test the market. In my view, all the necessary control and management mechanisms should be activated to ensure that the pilot phase successfully gets under way as quickly as possible. Furthermore, given that over EUR 1.5 trillion is required to build infrastructure (for the period 2010-2020) along with investment by Member States of between 0.5 and 2% of GDP, the level of funding needs to be increased considerably and existing and planned sources of funding need to be included. On that basis, I believe that EUR 230 million is clearly not enough to implement projects with medium- to long-term returns. Finally, the Member States should start, complete or implement reforms to promote private investments, starting by simplifying and streamlining bureaucratic procedures.


  Jaromír Kohlíček (GUE/NGL), in writing. (CS) The EU works with 1.05% of the GDP of the individual Member States as a spending limit in a seven-year period. Unsurprisingly, this is rather too little for infrastructure investments. It is logical that, under these circumstances, efforts are made to find additional resources for funding the trans-European transport and energy networks. The draft regulation of the European Parliament and of the Council is one such effort. A pilot phase of the project is now to be developed, and in the next planning period this initiative for project bonds within the framework of the Connecting Europe Facility should also generate a sufficient volume of resources from private investors. As these are reference bonds – in the repayment of various bonds they are rated immediately after World Bank bonds – this is a secure instrument for institutional investors, such as various funds. In the pilot phase of the project it has been specified that EUR 200 million should be earmarked for the trans-European transport network in 2012-2013, EUR 10 million for the energy network and up to EUR 20 million for the framework programme for competitiveness and innovation and ICT projects and broadband services. It has also been specified that resources obtained in this way will comprise a relatively small part of the investment capital for individual actions. A multiplier effect is expected with a ratio of 15 to 20. As this involves support for infrastructure investments, the Confederal Group of the European United Left – Nordic Green Left supports the regulation.


  Véronique Mathieu (PPE), in writing.(FR) ‘Project bonds’ meet investment needs in Europe and that is why I welcome the launch of a pilot phase of bonds. The European Investment Bank’s guarantee of EUR 230 million will increase the mobilisation of private capital and therefore exercise a leveraging function. This is a particularly opportune instrument in circumstances where banks are wary about providing finance. Bonds will meet investment needs in the areas of transport, energy and information technology infrastructures. This pilot phase will have to be evaluated to assess how suited it is to realities on the ground.

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