EU Finance Ministers gave their backing to the Commission's proposal to extend the European Fund for Strategic Investments (EFSI), in terms of duration and financial capacity ("EFSI 2.0"). Today's agreement is crucial as it demonstrates the dedication of all stakeholders to contribute to the continued success of the EFSI and the Investment Plan for Europe as a whole.
Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "Only two years after we presented the EFSI concept, Ministers of Finance have agreed in record time to extend and reinforce it to deliver even more and better investments."
President Jean-Claude Juncker announced a proposal in his State of the Union address of 14 September to reinforce the EFSI to boost investment further, to allow EFSI to continue delivering on the concrete results already achieved and to provide certainty to project promoters that they can still prepare projects after the initial investment period. The legislative proposal was presented on the same day.
Member States committed at a summit of 27 in Bratislava on 15 September as well as at the October European Council to agreeing their negotiating position on the Commission's proposal at today's Ecofin meeting, taking into account an independent evaluation. That independent evaluation was delivered on 14 November. The European Council will take stock of progress on the EFSI at its meeting on 15 December.
The Council also adopted conclusions on issues affecting investment in the EU. These conclusions recommend that 'bottlenecks' for investment should be tackled as part of the 'third pillar' of the Investment Plan. The third pillar of the Investment Plan promotes the removal of barriers to investment and greater regulatory predictability in order to keep Europe attractive for investments.
The Commission would like to thank the Slovak Presidency for the dedication and the fast progress made in the Council on this legislative proposal. The Commission calls on the European Parliament to reach an agreement quickly and on both co-legislators to secure a fast agreement on the proposal to extend EFSI.
The operations approved under the Investment Plan for Europe now represent a total financing volume of EUR 27.5 billion. They are located in 27 Member States and are expected to trigger total investment of around EUR 154 billion. (state of play 16 November 2016).
The European Investment Bank (EIB) has approved 151 infrastructure projects for financing under the European Fund for Strategic Investments (EFSI). These projects represent a financing volume of EUR 19.8 billion.
The European Investment Fund (EIF) has approved 234 SME financing agreements, with total financing under the EFSI of EUR 7.7 billion. Close to 377,000 SMEs and Midcaps are expected to benefit.
Since November 2014, the Commission has mobilised significant EU financial resources in an innovative way that maximises the impact of public funds and triggers private investment. Sustainable investment, in particular in infrastructure and small and medium-sized companies, has been at the centre of the Commission's political action, notably through a more efficient use of the limited resources of the EU budget, accompanied by measures to improve the general business environment.
The Investment Plan for Europe consists of three pillars.
- First, the European Fund for Strategic Investments which provides an EU guarantee to mobilise private investment.
- Second, the European Investment Advisory Hub and the European Investment Project Portal which provide technical assistance and greater visibility of investment opportunities and thereby help investment projects reach the real economy.
- Third, removing regulatory barriers to investment both nationally and at EU level.
Under the first pillar, the market absorption has been particularly quick under the so-called SME window, where EFSI is delivering well beyond expectations. To ensure that sufficient funding is available to continue providing finance to SMEs with EFSI support, the SME window was scaled up by EUR 500 million in July 2016.
Under the second pillar, the European Investment Advisory Hub was launched on 1 September 2015. Project promoters, public authorities and private companies can receive technical support to help get their projects off the ground, make them investment-ready. They can get advice on suitable funding sources, and access a unique range of technical and financial expertise. In order to provide investors with more visibility of what investment opportunities exist in the EU, the Commission created the European Investment Project Portal, which went live on 1 June 2016. Project promoters can submit their projects online, where they are matched with relevant investment opportunities – a kind of match-making service.
In order to remove barriers to investment – the third pillar of the Investment Plan - the Commission has already proposed concrete initiatives to help support investment and facilitate the financing of the real economy, such as lowering capital charges for insurance and reinsurance companies as regards infrastructure investments. The Energy Union, the Capital Markets Union, the Single Market and the Digital Single Market Strategies, as well as the Circular Economy package all contain specific measures that will remove barriers, promote innovation and further improve the environment for investment, if fully implemented. At the same time, Member States must continue to implement the necessary reforms to remove obstacles to investment identified in the context of the European Semester in areas such insolvency, public procurement, judicial systems and the efficiency of public administration or sector-specific regulations.