The aim of EFSI, to be 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 will assume part of that risk, thus encouraging private investors to get on board.
The fund is planned to include 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.
The plan is not intended to replace existing EU and EIB programmes, but instead will complement them.
Smaller budget impact on existing EU programmes
Parliament has ensured that the €6 billion cuts to the Horizon 2020 research programme and the Connecting Europe Facility(for transport and infrastructure, will be reduced to €5 billion. This was initially proposed by the Commission to free up money for the fund.
MEPs' views
José Manuel Fernandes and Udo Bullmann wrote the report and negotiated on behalf of the Parliament. Portuguese EPP member Fernandes said: "The Juncker Plan is an innovative instrument that will give a major boost to investment in Europe. € 240bn of the plan will go to investments and € 75bn will go to the backbone of our economy: the small and medium-sized enterprises. Politicians don't create jobs, but we can help those who do."
German S&D member Bullmann added: "The European Parliament initiated a reversal in economic policy and paved the way for investments urgently needed for modernising Europe. In addition, we put an end to the politics of concealing and disguising – clear responsibilities [for carrying out the plan] are attributed and a democratic involvement of the EP in the appointment of the managing director is ensured."
The plenary debate will start at around 15.00 CET on Wednesday, while the votes are scheduled to take place at 19.30 CET. Follow it all live on our website.
REF. : 20150417STO42603
