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(BRUSSELS) – The EU Council agreed Tuesday to extend the Fund for Strategic Investment, a flagship initiative under the ‘investment plan for Europe’, to 2020, with a target of half a trillion euros of additional investments.
The European Fund for Strategic Investments (EFSI), launched by the European Investment Group and the European Commission in 2015, aims to mobilise private investment in projects which are strategically important for the EU and help overcome the investment gap in the EU.
The Commission proposed to extend the fund’s duration until the end of the EU’s current Multiannual Financial Framework (MFF) in December 2020, with a view to reaching an investment target of 500 billion.
“Extending EFSI and creating a well-functioning capital markets union are key measures for supporting job creation and economic growth”, said Estonia’s finance minister Toomas Tõniste, for the EU presidency: “Investment has now picked up in Europe, due to favourable financing conditions and positive economic sentiment. But private sector investment levels are still too low and we need to continue our efforts to achieve a balanced and sustainable recovery.”
The draft regulation:
- extends the lifespan of the EFSI, also known as the ‘Juncker Plan’, until 31 December 2020;
- raises the investment target to 500 billion;
- increases the EU budget guarantee to 26 billion (of which 16 billion will be available for guarantee calls until mid-2018);
- increases the European Investment Bank’s contribution to 7.5 billion (from 5 billion currently), pending approval by the EIB’s board of directors.
To foster regional, local and smaller projects:
- the new rules provide for a bigger role of the European Investment Advisory Hub with a stronger local presence,
- the European Investment Bank (EIB) should, if possible, delegate the selection and monitoring of small-sized projects to national promotional banks, well placed to help with covering also regional, sectoral and cross-border projects, and
- in case stressed market conditions could hamper a project the EIB should exceptionally reduce the cost for the beneficiary of the financing.
The regulation was adopted without discussion at a meeting of the Agriculture and Fisheries Council. Provisional agreement with the Parliament was reached on 26 October 2017. The Parliament approved the regulation at first reading on 12 December 2017.
Extension of the European fund for strategic investment (press release, 08/11/2017)
