Flawed Juncker Plan (EFSI) passes in European Parliament
The European Parliament has today accepted the regulation on the creation of the European Fund for Strategic Investments (EFSI). Under the regulation, guarantees from the EU budget of EUR 16 billion (bn) and 5bn from the EIB should be leveraged to generate 315bn in total investment over 3 years. EFSI operations will be conducted by the EIB.
The regulation foresees cuts to CEF and Horizon 2020 of 2.8bn and 2.2bn respectively, to create a guarantee fund of 8bn, with the remainder coming from unallocated margins of 2015, 2016 and 2017. EFSI will bring an increase of the EIB competences and scope of operation. The plan per se represents less than 1% of the EU budget, which is already less than 1% of the EU GDP.
Liadh Ní Riada, GUE/NGL shadow rapporteur on EFSI for the Budgets Committee elements of the file, commented: “The Juncker plan should come with a health warning. Yes, we are of course welcoming of real investment but the ESFI does not go anywhere near real investment and more importantly it does not address the gaping hole we have in public investment as a result of continuous austerity policies.”
She continued: “The fact is the Juncker plan is an inflated plan. EUR 2.7bn from Horizon 2020 and 3bn from the Connecting Europe Facility was going directly into the EIB already before there was any Juncker plan. This is just rearranging the jigsaw pieces, a window dressing without any real substance.
“The socialisation of the cost of the EFSI has not been addressed in any meaningful way. The real impact on people, well we can only take a calculated guess at how dramatic that can be, increased cost of basic services – water, energy and so on, and of course this will be to guarantee bigger profit margins for the wealthy and elite.”
Fabio De Masi, GUE/NGL shadow rapporteur on the EFSI from the Economic and Monetary Affairs Committee, said: “The Juncker Plan was flawed from the outset. Even though Parliament managed to get some marginal improvements into the EFSI regulation, the key element of this plan remains stripping public assets to the benefit of private investors. Austerity has killed investment, and austerity must be ended to revive it.
“What Europe needs is a public investment programme of EUR 500bn additional public investment annually over ten years to kick-start the economy and bring an end to the economic and social crisis. This could be led by the EIB with backing from the ECB provided there is a sufficient level of democratic control. Additionally, member states could invest more, if they were to scrap the stupid straightjacket that is the fiscal compact. Instead the EFSI creates a profit-guarantee scheme for private institutional investors, at taxpayers' cost.”