How urgent boost investment in Europe without putting a euro extra money on the table? This is the equation that Jean-Claude Juncker is about to solve Tuesday morning. The new president of the European Commission must present his famous plan to invest 300 billion promised during their European campaign. And the least we can say is that it is dealing with numbers.
According to a European diplomatic source, the Commission has miraculously found how to inject 315 billion investment in three years . This represents 2% of EU GDP over three years is almost three times more than the stimulus package of 120 billion euros sold by François Hollande in 2012 in exchange for the ratification of the European fiscal treaty.
From 8-315000000000
The magic wand is based on a financial package for less complex. In all, the European Union will mobilize € 8 billion of existing EU funds. Objective provide guarantees for a new European fund, the Fund for strategic investments. The Commission experts are formal, this amount will raise 16 billion euros in guarantees. A total increased to 21 billion euros thanks to the mobilization of 5 billion from the European Investment Bank (EIB), thanks to profits from loans from the European public bank during the crisis.
With this war chest, the European Fund for strategic investments, lodged with the European Investment Bank, should be able to lift three times more money, 60 billion promised by the Commission. Targeted to support the bulk of the risk of major investment projects, the 60 billion should theoretically generate 255 billion of purely private money today not spent by the reluctance of private actors. The account is good: 60 + 255 well give EUR 315 billion. Welcome to the wonderful world of “leverage.” In total, one euro of public money must generate 15 euros investment.
Take charge of the risk to reassure the private
The mechanism is tantamount to industrialize the experimental phase of “projects bonds”, these project bonds that already allow France to finance private money on the deployment of high speed broadband internet in rural areas. For the Commission, it is very important that the Fund does not replace private money that would have been spent anyway but come unlock valuable projects but deemed unprofitable far as too risky. “We do not want to fund a third highway between Lisbon and Porto, where there are already two and which one is empty,” warns a European source.
The formula visibly mounted for stopgap, has the huge advantage of not requiring additional public money from the Member States. These may of course replenish the Fund on a voluntary basis, with the assurance not to worsen their public deficits as they get their hands on an active face of the injected money. But no need to wait for them to start spending reckoning. There will be no need to renegotiate any treaty, a long and risky procedure, or the EU budget, birth in pain. There are emergency: the European economy can not wait. Another advantage, not least, the famous rating from the rating agencies to the European Investment Bank, which held the precious AAA as the Germans, will be preserved. The institution of Luxembourg will not have to take more risk in all its operations.
The first euro spent late 2015?
There remains the question of the use of money. 75 billion will be reserved for lending to medium-sized businesses. Another 240 billion must be mobilized on investment projects in areas such as European transport, energy interconnection, digital … All will be selected for their value to the European economy by Directors General of the Commission and EIB supported by experts in each field and not on the basis of a national or sector allocation. The idea of linking the distribution of projects in advanced structural reforms as was mentioned a time seems, in these conditions, hardly possible, according to a European source.
The new fund is expected to be operational by the end of June 2015, the Commission hopes that aims to spend the first euros by the end of next year. A real sprint that Jean-Claude Juncker teams seem ready to run. It seems so simple that one wonders why they have not e done before.
No comments:
Post a Comment