Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

"You got to look for some more money to chip in my Investment Fund", Mr Juncker would be probably saying here to Francois Hollande. From left to right,  Jean-Claude Juncker, President of the European Commission and Francois Hollande, President of France in a meeting in Spain earlier this month (EC Audiovisual Services, 04/03/2015).

“You got to look for some more money to chip in my Investment Fund”, Mr Juncker would be probably saying here to Francois Hollande. From left to right, Jean-Claude Juncker, President of the European Commission and Francois Hollande, President of France in a meeting in Spain earlier this month (EC Audiovisual Services, 04/03/2015).

Last Tuesday the EU Finance ministers gathered in Brussels to decide for the fate of Juncker’s Investments Plan. The news is quite promising for EU Investments since all ministers agreed to support this Plan by setting up the European Fund for Strategic Investments (EFSI).

Italy also announced its contribution by pledging to invest 8 billion euros. Thus, it became the fourth country after Germany, France and Spain to practically engage to this long-term project.

It should be mentioned at this point, that France already took 2 more years of extension to cut its budget deficits within the EU guidelines, something that passed almost unnoticed during ECOFIN’s meeting.

A good start

Everything went well for the European Commission (EC) and especially for its president, Jean Claude Juncker. regarding his plans to bring investment and growth back to the bloc with the 315 billion euros Investment Plan in 3-year time period.

European Commission’s Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, stated for this success: “By reaching an agreement on the Regulation for a European Fund for Strategic Investments (EFSI) in less than two months, Member States deliver on the commitment they have taken at the European Councils in October and December last year. This also shows that Member States are serious about getting citizens back to work and the European economy back on a sustainable growth path.”

Pierre Moscovici, Commissioner for Economic and Financial Affairs, also supported this Plan by voicing that investments are needed to revive the sluggish EU economy and bring back its lost glory from pre-2008 times where investment was 15%-20% higher than it is now.

4 countries to invest in EFSI but…

The EU member states don’t seem to fully trust what the benefits would be for each and every country separately in order to put their money in the EFSI. This point led the first four countries to invest funds via their national developments banks and thus promote investments at domestic and not EU-level as was the original idea.

Particularly Germany and France were the first countries to invest 8 billion euros each to this Plan while Spain came third with 1.5 billion euros. The surprise came from Italy which decided to enter this project by adding another 8 billion euros, competing the two biggest European economies.

But it doesn’t sound logical a country like Germany to invest the same amount of money as France and Italy which are economies that do not grow to the extent the first does; on the contrary they tend to shrink. Is it because the grounds of this Plan are just setting up and Germany will raise its contribution later as this project evolves or the biggest EU economy doesn’t want to risk its public funds to support poorer and developing EU countries? After all, the money that were invested will be redirected to projects within Germany and not to member states that truly need infrastructure, research & development, education, health care provisions and many other basic servives.

Looking up for private investments

Jyrki Katainen is currently on a tour around Europe in order to promote the Investment Plan to as many people as he can and bring money to the EFSI. He will stay in France for 2 days (12 & 13/03) where he tries to persuade local businesses, government and also students for the usefulness of this project.

Portugal, Cyprus, Holland, Bulgaria and Hungary are going to be his next stops and the aim is to visit all 28 EU countries by October 2015 and hopefully return to Brussels with lots of money in his suitcase.

France’s extension

The EU Finance ministers gave “grace” of two more years to France to lower the budget deficit below 3% of GDP; the third extension the country is granted since 2009. France saved about 4 billion euros from imminent fines by the European Council since is not yet in line with the Stability and Growth Pact.

Something that was actually expected after the talks between the Council of the EU from one side and France and Germany from the other at the end of last year. The latter played significant role in the decision of the Council but now France is called for extra fiscal efforts which means implementation of more structural measures.

Will France be able to “fight” the budget deficits and bring them down? One this is for sure; the French government will do its best in order to lower them below 3% by 2017 because at the Hexagone they know very well that they will not be given a fourth chance, even if Germany is again on their side.

QE & Investment Plan

The implementation of the Quantitative Easing (QE) in combination with the Investment Plan for Europe are capable of returning growth and investments in the bloc and bust the economy. QE started with the best omens for everybody (except Greece that is left out in the cold) and especially for the Southern countries that wanted an immediate injection of liquidity.

However, Juncker’s Investment Plan needs time to start and to fully deploy to the real economy. Even then, it will still need lots of efforts to be able to gather all the public and more so private investments in order to bring more wealth and jobs in the Old Continent.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU-US trade deal: Europe to Americanize its social model?

Switzerland to favour EU citizens in immigration quotas as the risk of a new referendum looms

Why climate change matters for future health professionals

GSMA Outlines New Developments For MWC19 Shanghai

Angola’s President João Lourenço calls for stronger EU-Africa cooperation

Sweden has invented a word to encourage people not to fly. And it’s working

EU Budgets: Europe hoping for Xmas gifts

How banks should prepare for robots going rogue

Electronic cigarette – is it really a safer alternative to smoking?

These countries are leading the charge to clean energy

End fossil fuel subsidies, and stop using taxpayers’ money to destroy the world: Guterres

Amid continued suffering in Yemen, UN envoy welcomes reports of reduced violence

Here are three ways Africa’s youth are defeating corruption

The psychology of pandemics

Syrian Government’s ‘different understanding’ of UN role, a ‘very serious challenge’ – Special Envoy

Talent is worldwide. Opportunity is not. How can we redistribute it?

The 10 most common types of plastic choking Europe’s rivers

Is China about to launch its own cryptocurrency?

Doctors vs. Industry 4.0: who will win?

Employment and Social Developments in Europe: 2018 review confirms positive trends but highlights challenges, in particular linked to automation and digitalisation

It’s not your imagination, summers are getting hotter

Killing of Egyptian peacekeeper in Mali ‘may constitute war crimes’ Guterres warns, urging ‘swift action’

Spanish vote – bad luck for Greece: Does Iphigenia need to be sacrificed for favourable winds to blow in Eurozone?

‘Historic moment’ for people on the move, as UN agrees first-ever Global Compact on migration

Europe must regain its place as world leader in digital technology

These companies can recycle nearly anything, from cigarette butts to fax machines

Arrest of three Libyans wanted for grave crimes ‘would send strong and necessary message’ to victims, urges top Prosecutor

What does strategy have to do with a platform approach?

Guatemala Dos Erres massacre conviction welcomed by UN human rights office

Skeptic France about Trump-Juncker trade deal favoring German cars; EU’s unity in peril

This plastic-free bag dissolves in water

Why strive for Industry 4.0

Is Erdogan ready to tear down the bridges with Europe and the West?

Parliament adopts its position on digital copyright rules

Inclusion and diversity isn’t just good for employees – it’s good for the bottom line

China by numbers: 10 facts to help you understand the superpower today

The Indian case: health policies need to keep pace with public health literacy

Eurozone: Sovereign debt decreases for the first time since 2007

This solar-powered car lets you drive for free

‘Comprehensively include migrants’ or sustainable development won’t happen, warns General Assembly President

One in three fish caught never gets eaten

The US calls off globalization, targets Germany. Paris offer to Berlin comes at a cost

Nicaragua must end ‘witch-hunt’ against dissenting voices – UN human rights experts

‘InvestEU’ programme: big boost for jobs, growth and investment

The future of science could be in your gut. Here’s why

Access to health in the developped and developing world

Mosul’s ‘3D contamination’ adds to challenges of deadly mine clearance work

Parliament to ask for the suspension of EU-US deal on bank data

How did Facebook fool the Commission that easily during the WhatsApp acquisition?

Peru should help more young vulnerable people into work

Traditional finance is failing millennials. Here’s how investing needs to change

G7 summit: Trump Vs. G6 leaders on trade and climate change

Security Council approves ‘historic’ political Haiti mission, ending UN peacekeeping role in the country

A Sting Exclusive: Towards better business opportunities for the EU and its neighbours, Commissioner Hahn live from European Business Summit 2015

Unanswered questions for Europe’s youth in President Juncker’s State of Union

Vegans in France are using extreme tactics to stop people eating meat

The Eurogroup+ is born to govern the EU Banking Union

This project is turning abandoned fishing gear into volleyball nets

Deep fakes could threaten democracy. What are they and what can be done?

IMF’s Lagarde: Estimating Cyber Risk for the Financial Sector

More Stings?

Comments

  1. My spouse and I stumbled over here from a different page and thought I might as well check things out.

    I like what I see so now i’m following you. Look forward to going over your webb page
    yet again.

  2. What’s up everyone, it’s my first pay a quick visit at this
    web page, and ppst is really fruitful in support of me, keep up
    posting these types of content.

  3. whoah this blog is magnificent i really likee reading your articles.
    Keepp upp the great work! You realize, a lot of
    persons are looking round for this information, you could aid them greatly.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s