On 13 January, the EC announced that it put forward a legislative proposal for the intended European Fund for Strategic Investment, the tool at the heart of the €315 billion Juncker investment plan. The EC, together with the European Investment Bank, will establish the EFSI worth €21 billion, designed to mobilize further private and public funds so that the investment offensive reaches the €315 billion in the three years to come. The funds will be available for the most important investment projects identified and the actual funds allocation will be carried out by an independent body of experts within the Fund´s board.

More importantly still, the Commission clarified how it intends to provide more budget flexibility to countries who take part in the investment offensive. According to the Commission, the Member States´ contribution to the fund or to the strategic investment projects, or their reforms – either adopted, or planned with a very specific schedule of implementation, will result in a less strict assessment of their budgets with regard to their deficits. The Stability and Growth Pact (SGP) requires the Member States to run deficits no higher than 3% of their GDP and provides for a series of steps, including possible sanctions, if the threshold is not met. In the above-mentioned cases, the Commission is going to allow a maximum 0.5% of GDP flexibility to the states. This could immediately help France and Italy, whose 2015 budgets do not comply with the strict application of the SGP.

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