Off the wire
• Hillary refuses to debate with Sanders before California primary  • Zambian leader pardons 554 prisoners to mark Africa Freedom Day  • Feature: Kenyan innovator's challenges of commercializing products  • Essential to invest in care for disabled people: Chinese official  • Roundup: African leaders hail AfDB's plan to accelerate development  • Chinese FM makes five-pronged proposal for SCO development  • European Union finances Beatrice windfarm off Scottish coast  • S. African bourse closes higher, assisted by financial, resources shares  • Three detained Chinese vessels entered S. African waters due to bad weather: embassy  • Roundup: UN chief urges political solution to humanitarian crises  
You are here: 　 Home

"Juncker Plan" approves 11.2-bln-euro financing in 1st year of operation

Xinhua, May 25, 2016 Adjust font size:

The European Fund for Strategic Investments (EFSI), the core of "the investment plan for Europe" which got underway a year ago, has so far approved 11.2 billion euros worth (12.48 billion U.S. dollars) of projects.

The so-called "Juncker Plan", the bloc's response to the investment deficit affecting Europe since the beginning of the financial crisis in 2008, was approved in June 2015. The EFSI was launched immediately after.

According to details about the progress of the Juncker Plan published on Monday by the European Commission and the European Investment Bank (EIB), as of April 2016, 7.8 billion euros in financing for 57 infrastructure and innovation projects and 3.4 billion euros for 165 SMEs financing agreements had been approved.

The European Commission estimated that the above EFSI financing would trigger 82.1 billion euros investment, 80 percent of which would be from private capital.

However, a Bruegel report published May 17 said the pace of the investment plan needed to be accelerated if Juncker's targets were to be met.

"The Juncker Plan has been relatively slow to take off considering that it foresees the EIB disbursing 60 billion euros in three years, or 20 billion euros a year," Bruegel researchers Gregory Claeys and Alvaro Leandro said in the report.

Given the opportunity costs arising from taking money from the EU's main research and innovation and transport infrastructure programs, using EU budget resources is justified only if it leads to "additional" investment, the report said.

However, through evaluating the similarity with past EIB projects (non-EFSI EIB projects), the two researchers found that, out of the 55 EFSI projects for which details were available, 42 of them were very similar to non-EFSI EIB projects.

Therefore, the report said EFSI should only be used for really innovative and risky projects that cannot find funding.

Since the global economic and financial crisis, the EU has been suffering from low levels of investment. This fall in investment has been a significant drag on growth and employment, and it will also hold back Europe's growth potential in the long-term.

The investment plan aiming to bring investments back in line with historical trends was initiated by President of European Commission Jean-Claude Juncker in November 2014.

The main feature is to use a fraction of the EU budget as a guarantee for EIB projects that would be riskier and more innovative than the usual ones. European Commission predicted that these projects would generate a total of 315 billion euros of investment in three years through leverage and co-financing. Endit