EU Reveals Details Of EFSI Investment Fund

EU sources say the European Commission has agreed a much touted plan to inject 315 billion euros into the EU's ailing economy. But critics questioned its power to kick-start growth and tackle record unemployment.



Details have emerged of an eagerly awaited European Union 300-billion-euro investment plan to boost the continent's flatlining economy.



The European Commission proposes to have the European Investment Bank manage the new fund, which will finance infrastructure projects in areas such as broadband data connections, energy and transport, education, research and innovation.



Leveraged investment fund



The new European Fund for Strategic Investment will have 21 billion euros in funds. But these funds will be reportedly leveraged by a factor of 15 to have a net effect on the bloc's economy of about 315 billion euros ($390bn).



It's the cornerstone of Juncker's five-year agenda to jumpstart the EU's moribund economy, which has failed to grow effectively since the Great Recession, is mired in mass unemployment and threatens to sink into deflation.



He will formally unveil the plan to the European Parliament in Strasbourg on Wednesday before submitting it to EU leaders at a summit in December.



No new public funding



Crucially, Juncker's plan relies on no new money. Instead sources say existing funds will be re-engineered to provide more added value than in their current form.



Under the reported proposal, the existing EU budget will be used to finance a 16 billion euro guarantee, while the EIB will commit 5 billion euros. The total 21 billion euros will seed the EFSI to finance private sector driven projects. Officials say the projects would provide a "real added value" for the European economy.



bew (AFPE, DPA)