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€315bn EU investment plan may create 2.1m jobs

The European Commission’s €315bn investment plan to spur growth could create 2.1m net jobs, lowering the bloc’s jobless rate by 1% by 2018, the International Labour Organisation (ILO) said yesterday.

But if the three-year plan, announced by Commission chief Jean-Claude Juncker in November, fails to attract and leverage private investment, it would create just 400,000 jobs, barely making a dent in the EU’s 23m unemployed, it said.

“If the plan is well designed, by contrast, the number could reach 2.1m new jobs by 2018. This would enable a reduction in unemployment in the European Union by 0.9%, almost a 1% lower unemployment rate by 2018. It’s a significant number,” Raymond Torres, director of the ILO’s research department, told a news briefing.

“The Juncker plan is potentially an important way to stimulate the real economy directly in complement to the monetary injections announced by the European Central Bank,” he added, referring to the massive bond-buying programme announced last week.

But investors being asked to stump up most of the cash say Europe needs to come up with more government money and more details if its grand plan to boost growth via infrastructure projects is to get off the ground.

The plan of loans for infrastructure and small business is meant to include €252bn in private investment to help bring down current EU-wide employment of some 10%, the ILO said.

“Therefore it is very important to involve projects with large economies of scale, for example energy networks in Europe or green investments, which have a large externality and would not be carried out normally by private investors alone,” Torres said.

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