The Plan is a step in the right direction but is not ambitious enough

Today in the European Parliament in Strasbourg Jean Claude-Juncker presented his Investment Plan for Europe to the MEPs. It will seek to attract 315 bln Euro of investments in the next 3 years. For more than 5 years now the socialists have been insisting that austerity budgetary discipline alone does not lead to growth. One of their key demands in exchange for their support for the election of Juncker as Commission President was precisely the creation of a large-scale public-private investment program to boost the European economy.

In his capacities as MEP and PES leader, Sergei Stanishev has been repeatedly calling for concrete proposals for the creation of a fund to drive the European economy forward. Commenting on the Juncker plan presented today, Stanishev said: ‘The new Commission kept its promise to come up with the Plan in a short time. What is positive is the creation of a new investment instrument – the European fund for strategic investments with a capital of 21 bln Euro. This instrument will help materialize important projects in the fields of railway transport, energy efficiency and innovations. 75 bln Euro from the total envelope are planned specifically for small and medium enterprises.’

However, Stanishev expressed his concern that it will be hard to achieve this 315 bln Euro target as the Fund itself will have only 21 bln Euro capital and rely on attracting 15 Euro of additional private investment for each 1 Euro of the Fund’s capital, i.e. will seek a leverage effect of 1:15.

The socialists have expected a larger-scale plan backed by fresh money. Our ambition is to create the opportunity to capitalise the European Investment Bank with real money, including contributions from Member States. In order for this to happen, guarantees must be given that these contributions will not be calculated as a new debt under the Stability and Growth Pact and the excessive deficit procedures. Apart from this, good, viable projects must be prepared while at the same time making sure that money is not invested only in big European economies.

 

We as socialists will work hard to make sure that this new instrument is not being used only for projects with direct profit but also for projects with longer-term return on investment and which contribute to the modernisation of the economies. This Plan is due to be in place only for the next 3 years, but I think that it should be extended at least to 2020 so that we can bridge the 700 bln Euro investment gap required to revive the economy, Stanishev said.