Today Spain announced that it will contribute €1.5 billion to projects benefiting from finance by the European Fund for Strategic Investments (EFSI) which is the core element of the Investment Plan for Europe. The contribution comes via Spain's National Promotional Bank, the Instituto de Crédito Oficial (ICO).
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness welcomed the news: "I am very pleased to be in Spain to receive this excellent news from the Spanish government. We are one step closer to reaching the target €315 billion total investment from public and private partners, and I encourage other Member States to follow Spain and Germany's lead. This is a great day not only for Spanish businesses, but for businesses across Europe."
The announcement comes just days after the European Investment Bank (EIB) gave the green light for pre-financing for small- and medium- sized companies (SMEs), as well as some infrastructure projects, before the summer.
National Promotional Banks – such as ICO in Spain and KfW in Germany – have a crucial role to play in getting Europe investing again. They have the expertise to carry out the Investment Plan, and they ensure the most efficient use of public resources. Germany announced in February that it will contribute €8 billion to the Investment Plan through their National Promotional Bank, KfW.
The economic crisis brought about a sharp reduction of investment in Spain. In 2014, Gross Domestic Product (GDP) and private consumption were respectively 5% and 9% below their peaks in 2007, whereas investment was still 36% below (in constant prices).
However, investment did start to grow again in Spain in 2014 (by 3.2%). It is expected to accelerate during 2015 and 2016 and become a key contributor to GDP growth.