When Jean Claude Juncker, the European Commission President came to power last year he set out a list of 10 priorities for his 5-year term, known as his Political Guidelines. At the centre of these guidelines is a commitment to boost for jobs, growth and investment in the EU. As the guidelines set out, the ‘top priority is get Europe growing again and to increase the number of jobs without creating new debt.’
EU levels of investment have fallen significantly through the economic crisis in the EU, down by over €430bn since a peak in 2007. For this reason, President Juncker has tasked his Commission with bringing forward a significant investment package to get Europe growing again and get people back to work. The programme has been designed as a three pronged approach and aims at removing barriers to investment in the EU.
The first of these will be the European Fund for Strategic Investments (EFSI) which aims to deliver €315bn of public and private investment over the next 3 years. The fund will be seeded by the Commission with an EU Guarantee of €16bn and an additional €5bn the European Investment Bank, this €21bn fund is expected to be leveraged 15 times supporting private investment. The fund will be set up within existing EIB Group structures, allowing it to start quickly.
The second of the 3 parts of the programme will focus on ‘supporting investment in the real economy’ and bring a clearer vision of viable projects and more transparency to the decision of which projects will receive funding. Two main focuses have been agreed for the fund: Infrastructure and Innovation, and SMEs, supporting investments from broadband and energy networks to companies with fewer than 3000 employees. Central to this part of the programme will be the creation of an EU portal which will list projects aimed at bringing real added value to Europe's economy. The plan also foresees the establishment of an investment advisory hub to help identity and support projects.
Finally, the Commission will focus on the need to create an investment friendly environment in Europe. The Commission’s analysis has shown that closing gaps in the single market and exploiting its full growth potential could possibly generate at least an additional 11% of EU GDP. A key focus will be improving access to finance for SMEs.
The new programme is open to any company or nation. Applicants will be able to submit projects directly to the relevant channel, with the Commission’s aim of having the programme up and running by January 2015. For more information visit the European commission website.