EU finance ministers agreed to proceed with a planned €315bn investment plan, while reminding crisis-hit nations it will not offer them special assistance.
The investment fund, EU Commission president Jean-Claude Juncker’s flagship effort to jump-start growth, won a green light from ministers at yesterday’s meeting in Brussels. This paves the way for discussions with the European Parliament, as policy makers target a final deal by June.
Germany, the Netherlands and the UK led calls for the proposal to resist political influence so the fund could seek out projects that are most deserving of help. In contrast, Hungary and other eastern European nations called for a less centralised approach, while Greek finance minister said the plan should acknowledge the “dramatic lack of credit” in countries hit hardest by the crisis.
EU Commission vice president Jyrki Katainen said the plan must resist pressure to steer help to needy regions or nations.
Such quotas are “exactly what we have wanted to avoid” when designing how the plan could offer loans or guarantees to spur private investors, he said. “It’s up to the member states to create the right certainty and surrounding for investment.”
“No one can co-finance investment if there is no private company who would like to invest in some particular country.”
Juncker’s plan envisages using €21bn of EU seed money to mobilise 15 times as much investment in co-operation with private investors. To gain financing help, projects must show private-sector backing and evidence they will offer a return on investment. Germany, France, and Italy have each said they will contribute €8bn to the plan through their national promotional banks, with another €1.5bn pledged from Spain. Katainen said more countries are looking at participating through similar channels.
“The politics of this is ugly but the Juncker plan is about the EU investment gap and for this you cannot avoid the big and strong countries,” said Guntram Wolff, director of the Brussels-based Bruegel think tank. The investment plan may be caught between calls to boost demand and to meet infrastructure needs, Wolff said.
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