posted at 21:50
Author Name: Danny Kemp with Alex Pigman in Brussels
Juncker unveils massive EU investment plan
As expected, overall responsiblity for the three-year plan will fall to the European Investment Bank, a little-known EU institution based in Luxembourg that is often criticised for its lack of ambition. Juncker will formally introduce the plan to the European Parliament in Strasbourg on Wednesday before submitting it to EU leaders at a summit in December. The plan announced Tuesday is designed to attack the investment problem head-on, but with the added challenge to do so without more public spending, with most EU countries already paralysed by high deficits and mountains of debt. Crucially, the Juncker plan in the end relies on no new money, but re-engineers existing funds in such a way, officials said, that will provide far more added value than in their existing allocation. In essence, the plan uses existing cash from both the EIB and EU to feed an investment fund that will be tasked with financing private-sector driven projects. Economist Reinhard Cluse at UBS in London said that EU investment plans "Focus too hard on big headline numbers". Expectations have been high for the plan, with EU member states at odds over the final amount and the balance between public and private spending. Economics Affairs Commissioner Pierre Moscovici warned last month that whatever the case, the plan should be convincing.

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