The EU’s strategic investment fund designed to kickstart projects worth €315bn will go to riskier countries, the commissioner in charge of the strategy said.
Fears that this would exclude Ireland, currently able to borrow on the markets at less than the rate charged by the European Investment Bank, were downplayed by Ibec, the employers and business organisation.
The former Finnish prime minister, Jyrki Katainen, who is now a commission vice president with oversight of jobs, growth and investment policies, said: “We will invest in countries with more risk than others.”
Werner Hoyer, president of the EIB, that plays a vital role in the fund, said their comprehensive study showed that risk aversion was to blame for the lack of investment in Europe at the moment.
“Risk aversion is the problem and we must go into higher risk and this is why we need EU money as a coverage for this,” he told a press conference in Strasbourg where the plan was formally introduced.
Head of IBEC Europe, Eric O’Donovan, said that the announcement of the fund was just the first step and while it was important there were other elements to be considered, including the details of how it would operate, which he thought would be discussed by finance ministers and EU leaders next month.
Reaction to the plan was mixed with ETUC, the trade union body, saying the drop in investment has been €280bn a year and this fund would fill just over a third of it for each the three years of its existence.
Munster MEP Deirdre Clune urged the government to put forward plans quickly. “Could Minister Alex Whites recently announced broadband proposal be facilitated using this €315bn euro fund?
“Could our Ports which are seeking to develop benefit from this fund? We must look at every aspect of our infrastructural gaps to see what we can submit funding for.”
Commission president Jean Claude Juncker said that a roadshow will explain the package in each member state and also outside the EU. They and the EIB will provide technical and other help to ensure the funds are absorbed and best use made of them.
The fund will begin with €16bn from the EU budget, half of which will be a buffer and €5bn from the EIB billion will be used by the EIB to raise money on the markets providing a total of €61bn, to be lent at long maturities for the riskier parts of projects.
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