As promised during his confirmation speech in front of the European Parliament, Commission President Juncker presented last week his ambitious investment plan for Europe. The aim of the plan is to kick-start the economy beaten by years of crises at many levels and bring long-term growth. Mr Juncker originally promised a €300 billion plan. Already then, though, experts predicted it will in fact be a more limited EU instrument designed in the way to leverage large sums of money from different sectors – EU, public and private.
These words were confirmed. The EU will put in place a new €21 billion European Fund for Strategic Investment (EFSI) over the next 3 years. The €21 billion come from a €5 billion loan from the EIB, the remaining €16 billion provided by the EU based on a €8 billion guarantee. This guarantee is in fact a sum of a part of Connecting Europe Facility and Horizon 2020 Facility, plus a €2 billion budget margin. This limited financial instrument will serve as a starting point of an ambitious investment scheme with a 15-fold leverage effect, bringing the total investment to more than €300 billion in the next 3 years. According to the Commission, the EFSI´s €21 billion would in fact mobilize €60 billion ready in the EIB for investments, which in turn would attract more and more public and private investors to join – allowing another fivefold increase of the overall value.