Commission takes on board findings of three evaluations, in line with its proposal to reinforce and expand the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe.
The Investment Plan for Europe has already proven useful in encouraging a sustainable increase in investment across Member States. Given the concrete results achieved since the Commission unveiled the Investment Plan two years ago, President Jean-Claude Juncker presented a proposal in his State of the Union address of 14 September to reinforce the EFSI to boost investment further.
Three evaluations followed that proposal, including an independent evaluation that was foreseen when the EFSI was set up. Their findings are summarised in today’s Commission Communication and will feed into the legislative debate on the Commission’s proposal with the European Parliament and Member States. Member States committed at a summit of 27 in Bratislava on 15 September as well as at the October European Council to agreeing their negotiating position on the Commission’s proposal at the Ecofin meeting of 6 December, taking into account the independent evaluation.
The Commission published its report on 14 September. The European Investment Bank – the Commission’s strategic partner in the Investment Plan – presented its evaluation on 5 October. Finally, global accounting firm EY published an external, independent evaluation on 14 November. All three reports find that the EFSI has already increased access to financing as well as mobilised private capital, and identified areas in which the Investment Plan could be enhanced.
President Jean-Claude Juncker said: “The Investment Plan is our flagship policy. It has already shown it works to improve Europe’s investment environment. We have listened and learnt from the early experiences. The feedback we have received is in line with our proposal to fine-tune, expand and strengthen the Plan.”
Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The Investment Plan is bringing concrete results and is reaching people and companies across Europe. Companies can expand their activities, hire new employees and invest more in research and development. The projects which the EIB has approved under the EFSI mobilise EUR 154 billion in total investments across 27 Member States and support almost 380,000 SMEs. We urge Member States and the European Parliament to adopt our EFSI 2.0 proposal without delay to help us support sustainable investment in order to put Europeans back in jobs and to boost EU growth.”
The findings in the three evaluations are broadly addressed in the Commission’s proposal to double the duration and capacity of the EFSI by extending, in a first step, its duration until the end of 2020 and increasing the total investment target from EUR 315 billion to at least half a trillion euros. The proposal already puts greater focus on private sector contributions and additionality as well as on enhancing transparency in the selection of projects.
All three evaluations also point to a high potential in developing new forms of cooperation between the EFSI and other sources of EU funding. They also underline the need to carefully monitor the possible competition between some of those funds with the EFSI. The Commission’s proposal also emphasises the potential benefits of combining the EFSI with other EU funds and on co-financing from National Promotional Banks (NPBs) as these are crucial ways to improve the EFSI’s geographic coverage, particularly in helping to reinforce the EFSI in less-developed and transit regions. Among others, the support to those regions is therefore enlarged by an explicit reference to any industry that would not otherwise be covered in EFSI’s general objectives. In order to create a steady supply of projects and Investment Platforms and to increase the combination of different EU funds, the proposal also includes enhancements to the European Investment Advisory Hub.
The Commission has also put forward initiatives to facilitate the financing of the real economy. Member States will, for example, benefit from clearer guidance on public accounting rules, particularly in the area of Public-Private Partnerships (PPPs). Eurostat and the EIB released a guide to the statistical treatment of PPPs in September.
Since November 2014, the Commission has mobilised significant EU financial resources in an innovative way that maximises the impact of public funds and triggers private investment. Sustainable investment, in particular in infrastructure and small and medium-sized companies, has been at the centre of the Commission’s political action, notably through a more efficient use of the limited resources of the EU budget, accompanied by measures to improve the general business environment.
The Investment Plan for Europe consists of three pillars.
- First, the European Fund for Strategic Investments which provides an EU guarantee to mobilise private investment.
- Second, the European Investment Advisory Hub and the European Investment Project Portal which provide technical assistance and greater visibility of investment opportunities and thereby help investment projects reach the real economy.
- Third, removing regulatory barriers to investment both nationally and at EU level.
Under the first pillar, the market absorption has been particularly quick under the so-called SME window, where EFSI is delivering well beyond expectations. To ensure that sufficient funding is available to continue providing finance to SMEs with EFSI support, the SME window was scaled up by EUR 500 million in July 2016.
Under the second pillar, the European Investment Advisory Hub was launched on 1 September 2015. Project promoters, public authorities and private companies can receive technical support to help get their projects off the ground, make them investment-ready. They can get advice on suitable funding sources, and access a unique range of technical and financial expertise. In order to provide investors with more visibility of what investment opportunities exist in the EU, the Commission created the European Investment Project Portal, which went live on 1 June 2016. Project promoters can submit their projects online, where they are matched with relevant investment opportunities – a kind of match-making service.
In order to remove barriers to investment – the third pillar of the Investment Plan – the Commission has already proposed concrete initiatives to help support investment and facilitate the financing of the real economy, such as lowering capital charges for insurance and reinsurance companies as regards infrastructure investments. The Energy Union, the Capital Markets Union, the Single Market and the Digital Single Market Strategies, as well as the Circular Economy package all contain specific measures that will remove barriers, promote innovation and further improve the environment for investment, if fully implemented. At the same time, Member States must continue to implement the necessary reforms to remove obstacles to investment identified in the context of the European Semester in areas such insolvency, public procurement, judicial systems and the efficiency of public administration or sector-specific regulations.
Compliments of the European Comission