EN - President Junckers Investment Plan for Europe - Statement by Werner Hoyer, President of The European Investment Bank 25.11: I will propose to the governing bodies of the Bank to support the plan presented by President Juncker just a few minutes ago and to take the necessary decisions in the organs of the Bank in the next weeks and month. That, of course, will then lead to the presentation in the Council of the Finance and Economic Ministers in December and to the presentation in the European Council in December as well. We are firmly committed to tackling Europe’s investment gap head-on. At the beginning of the year, the Bank made a study on investment gaps in Europe and contributed to the awareness that, for seven years now, Europe has been behind the 2007 investment figures by at least 15% and sometimes 20%, and this is persisting. Beyond that, for almost 15 years Europe has been suffering from an innovation gap in comparison to our main competitors. Our main competitors are not within the Union, they are outside, and in comparison to some of the most advanced of them, we have been trailing for 15 years by almost 1.5% of GDP per year behind their expenditure on innovation, research and development. Therefore, it is necessary to take action, and therefore I proposed to Ecofin to first make a study of whether the allegation that investment opportunities do not exist is really true. We had a taskforce which concluded its work only a few days ago. It shows clearly that, although there might be quite a bit of wishful thinking in these lists as well, projects do exist, as do project ideas and project needs, so the question remains: why are these gaps not being filled by the private sector and by all those who can contribute to filling them? What are the hurdles to investment? They can be on the risk side - we are going to address it. They can be on the regulatory side, they can be on the legislative side, and I am very happy to hear that the Commission President is resolved to tackle these issues as well, and, of course, the question of confidence, which is decisive for any investment decision in Europe and beyond. We therefore have to put things in sequence: identification of the investment gap, identification of the reasons for these investment gaps not being filled, and then the question of the instruments we are going to use. We can look back at a history of the last seven years in the crisis. Since 2007, the EU Bank has provided more than EUR 500 billion for investment across Europe, and by the end of next year we will have delivered EUR 180 billion of new investment, following a capital increase recommended by the European Council in 2012. I was not sure in 2012, when I promised to the European Council, that we would make 18 times as much out of these EUR 10 billion, but now I can tell you that probably, when I come back next year in early December, we will have overshot this target of EUR 180 billion additional investment in Europe by far. So what is the issue today? Before the crisis, projects were financed directly through public budgets, or the public sector would assume risks to catalyse private support. Capacity for public spending for such projects is now reduced, leading to underinvestment and jeopardising long-term competitiveness. However, in contrast to the darkest days of the sovereign debt crisis, liquidity is no longer an issue, and money is available for the safest projects. Nonetheless, some segments of the market are risk-averse – partly due to new capital and lending standards – and in many countries, SME access to finance remains a concern. By the way, this is a case where one can show that one-size-fits-all does not hold, because the access to finance for SMEs is quite differentiated in the Member States of the European Union, and we have to address it in a differentiated manner. It is essential to tackle these market failures that continue to prevent investment in higher-risk infrastructure projects. These will be addressed as part of the investment plan by the new fund which the President of the Commission has just introduced. I will propose to ECOFIN and to the European Council that the EIB contributes EUR 5 billion to the new initiative. That will come together with the EUR 16 billion coming from the EU budget, to be confirmed, of course, by Parliament and the Council. The new proposal allows the EIB to increase support for risky and more capital-intensive projects. It will be set up in the coming weeks and start to deliver in 2015 using structures already in place. This is the advantage. I am aware that you will have to take key decisions in this context, as will the Council, so it will take time until all the new structures are in place. The EU bank is ready to bridge that time gap so that we can start delivering in early 2015. To be clear: this new engagement will not impact EIB engagement outside the European Union, where the EIB is a valued source of finance and expertise, supporting projects around the world. Ten per cent of our business goes outside the European Union, and we are a very necessary and valuable partner supporting the European Union in its foreign, development, humanitarian, energy and climate policies and other areas. We believe that the proposed initiative can make a real difference to unlocking additional investment in Europe. The European Investment Bank is aware that this is not the silver bullet, but it represents the EIB’s concrete contribution to addressing Europe’s most pressing investment needs that will ensure that, once again, we can make a difference. (Applause) © Frédérick Moulin 2014 - EU2014 - All rights reserved.
Posted on: Mon, 01 Dec 2014 14:55:36 +0000
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