Junckers investment fund to reinforce recovery policy

The European Parliament, the European Commission and the Council of Ministers reached an agreement about the European Fund for Strategic Investments (EFSI). This must result in 315 billion euros’ worth of extra investments in, among other things, research and innovation, infrastructure and SMEs. “But structural reforms remain essential to build a strong economy,” N-VA Member of European Parliament Sander Loones warns.

The so-called Juncker Fund is not a fund. Through EFSI, the European Union extends a guarantee to the European Investment Bank (EIB) that makes it possible for them to support projects that would normally not be eligible for financing. These are often projects with a slightly higher risk factor. “The EFSI does not deliver a big bag of money, but instead a partial guarantee for some of the risk,” Loones explains. “This must encourage private investors to free up money for investments.”

European capital is needed in order to offer this guarantee. To this end, the Commission will take away 2.2 billion euros from the existing European investment programmes Horizon 2020 and Connecting Europe Facility (CEF). “These are already providing extra growth and jobs and are also very important for our Flemish research institutes,” says N-VA Member of European Parliament Anneleen Van Bossuyt. “So it is disappointing that the Commission chooses to cut into those resources. Basic research will surely suffer from this.”

“Structural reforms and a reduction of shortages and debts remain crucial,” Loones concludes, emphasising that EFSI is only part of the solution. “Without a strong recovery policy, the EFSI investments will end up being just a drop in the ocean.”