Europe split over achievements of Juncker Plan
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E-mail Xinhua, June 9, 2016
One year on from its launch, members of the European Parliament (MEPs) voiced sharply divided verdicts on the progress of the multi-billion euro investment plan of the European Union (EU), or the so-called Juncker plan.
In Wednesday's debate with EU Commission Vice-President Jyrki Katainen on the Investment Plan for Europe, the two biggest political groups in the parliament, EPP and S&D, broadly welcomed the work of the European Fund for Strategic Investment (EFSI). Their MEPs gave the green light to the European Commission's planning proposal to extend the lifetime of the plan.
Katainen said that the Juncker Plan had helped to remove barriers to investment and highlighted its benefits for small and medium-sized enterprises (SMEs).
Over 185 agreements between the EFSI and banks would provide finance for over 150,000 SMEs, he said, adding that the Commission planned to present proposals later this year to extend the three-year term of the EFSI and to expand investment into third countries.
The aim of the investment plan, over its three year duration, is to activate at least 315 billion euros (358 billion U.S. dollars) public and private investment, from which 240 billion euros are for infrastructure projects and 75 billion euros are to invest in SMEs.
"In one year, EFSI has already mobilized 100 billion euros in 26 member states, exceeding expectations for SMEs as it mobilized 49 billion euros out of the 75 billion euros assigned to them. Looking at such a positive performance, we believe that EFSI should continue beyond the three years originally planned," stated Jose Manuel Fernandes, EPP Group Spokesperson.
Othmar Karas, the EPP Group's Rapporteur on the economic orientation of the Juncker investment fund, called for an extension of the fund to Africa.
"The start of the European Strategic Investment Fund was a success. Yes to prolonging the fund now. Yes to extending the fund to strategic investment on the African continent as well. Yes to new instruments which allow for risky investments that cannot be financed otherwise. The fund should not be just another cash distribution bag, but offer leverage for projects which would not fly otherwise," he stressed.
The Socialists and Democrats (S&D) called on the European Commission and the European Investment Bank (EIB) to take more risks in order to boost the investment in Europe.
"Some major results have been achieved but we can and should do more," S&D group leader Gianni Pittella said.
"The financing has to be additional not a substitute. The EIB have to take higher risks and finance projects that would not have been financed without the investment plan," he added.
"We must ensure that the extension of the investment plan announced by the Commission will be serious and effective response to the economic and social crisis which is affecting Europe right now," he stressed.
However, MEPs from smaller groups were skeptical about its achievements to date.
European Liberals and Democrats (ALDE) have urged the investment plan to focus on the most innovative projects, stressing that investments alone are not enough to improve Europe's economy.
"We have to make sure that EFSI only funds truly innovative projects that would not have been funded anyway via other financial tools such as the Connected European Facility or Horizon 2020. The Commission needs to speed up and improve the quality of the projects to make the Juncker Plan a success," ALDE Vice-President Pavel Telicka said.
Sander Loones from the European Conservatives and Reformists group (ECR) suggested it was too early to assess the success of the EFSI and warned against "rushing in" with plans to extend investment into third countries.
European United Left, Nordic Green Left group (GUE/NGL) labeled the Juncker Plan as unfair and biased in favor of richer member states during their reaction to the midterm review.
Miguel Viegas said the ambitions were unrealistic and the plan had allowed large companies to dominate.
"There was no geographic coverage or criteria as to where these investments would go: just large companies dominating the private sector. Private management is being brought in over public services at the cost of development and focusing on profits for large multinationals over everything," said the Portuguese MEP.
"What we are seeing is that much of the money went to the wealthier and more developed regions of Europe. We are seeing fictitious results being broadcast and this public program of investment trampled upon in so many member states," he said.
Echoing those sentiments, Greek MEP and Vice-President of the European Parliament Dimitrios Papadimoulis said Katainen should take responsibility for the "unbalanced nature of the investments."
"The Juncker plan has to be focused on creating greater investment throughout Europe but particularly where there is the greatest poverty, the greatest unemployment and the greatest lack of investment," he stressed.
"We need to adapt this investment, apply it to the poorest regions, support the poorest and the SMEs," he said.
Philippe Lamberts, co-president of the Greens (Greens/EFA), called for more money for the plan and said it should focus on countries which lack investment and have most potential for renewable energy projects.
UKIP leader Nigel Farage from Europe for Freedom and Direct Democracy ((EFDD) called EU's investment plan a "pie in the sky."
"I think these grand projects that in many ways, are sowing the seeds of the end of this political project," he said.
Steeve Briois, MEP from Europe of Nations and Freedom Group (ENF), which is skeptical of European integration, described the EFSI as a "total failure."
He criticized that the plan had focused financing on large, urban areas which had aggravated regional disparities.
The investment plan aiming to bring investments back in line with historical trends was initiated by Juncker in November 2014. The plan was approved in June 2015 and the EFSI was launched immediately after.
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. The European Commission predicted that these projects would generate a total of 315 billion euros of investment in three years through leverage and co-financing.
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