The plan, called 'Connecting Europe', would fund €50 billion worth of investment from the EU's 2014-2020 budget to improve Europe's transport, energy and digital networks, Barroso said.
"Today we are making a down payment for Europe's future growth and jobs," he said.
The EU must help to build the roads, railways, energy grids, pipelines, and broadband networks that are so important to Europe's citizens and businesses, the Commission explained.
Under the plan, which still needs approval from EU member states and the European Parliament, €31.7 billion will be invested to upgrade Europe's transport infrastructure, €9.1 billion in trans-European infrastructure to meet the 'Europe 2020' energy and climate objectives and €9.2 billion in support investment in fast broadband networks and pan-European digital services, he said.
Barroso explained that from 2014, under the new EU financing framework, a 'Project Bond' initiative would be incorporated into the 'Connecting Europe' project.
Even though the next EU budget for 2014-2020 has still to be approved by the European Parliament and EU member states, Barroso said the Commission would already put in place a "pilot phase", using up to €230 million from the present budget to help raise up to €4.5 billion from the private sector.
Recycling old ideas?
Asked by EurActiv why it took so long to define a clear blueprint for the project bond initiative since it was first announced a year ago (see background), Barroso said the initiative was actually accelerated, as it had been initially designed to become operational after 2014.
Barroso rejected suggestions that the EU was recycling old proposals after he was asked whether 'Connecting Europe' was in fact a remake of the so-called 'Barroso package', presented at the end of his first term, when the EU allocated €5 billion of unspent EU money for clean energy, gas interconnectors and broadband.
He insisted the €5 billion package was "a huge success, now we are building on that success."
Project bonds will form a new category of securities in the capital market, said Economic and Monetary Affairs Commissioner Olli Rehn, who spoke alongside Barroso. He admitted that the Commission had to build the instrument "gradually, with a phase-in period".
Risk sharing
"What do we mean by project bonds? Imagine an infrastructure project with revenue potential, for instance, a road toll. It is often difficult for project companies to attract sufficient financing because of the risks associated with the long-term nature of such projects. With a certain amount from the EU budget, which is pre-specified, we can help private companies to attract third party funding from the capital market," Rehn went on.
Not all infrastructure projects were suitable to be funded through project bonds, Rehn said. The techniques to be employed with the European Investment Bank have already been tested in some current instruments such as bank loans guarantees.
Now the same technique would be expanded to capital markets, to pension funds or insurance companies, who want to invest long-term, but cannot take too much risk, Rehn explained.
The European Investment Bank will be our risk-sharing partner, he said.
Rehn concluded by saying that the Commission was inviting the European Council and the Parliament to consider project bonds "a matter of priority" and adopt the pilot phase "promptly and as soon as possible".
COMMENTS
Connecting Europe...by making us all pay tolls?
Growth here means more revenues for companies and forcing the ordinary men and women to pay for services that should be public. Public highways, for example. And reasonably priced train tickets. Or
It seems Mr. Barroso is having a political stance. Germany and the european crisis have eclipsed his commission as it was never able to help find a consensus within the EU.
This comment is also valid for M. Von Rompuy.
European member states are the only entities capable of solving the crisis.
This initiative - or is it an older idea? - would be very good for the EU if only it was to attract the right sort of investments.
Most transport routes in Europe seem adequate for their purpose - if roads - but railway and shipping lack definitive details. The enhanced Shipping Link from the EU (heartland) of the Mediterranean to Malta (for instance) or to North Africa (the MENA) link to Morocco would be a very appropriate connection for even this latter one could be a bridge! And we should be aware that in recent time there has been much thought given to building an alternative Bosphorous Canal link between the Black Sea and the Mediterranean through Western Turkey which would be a tremendous boost to the economies of the Western Black Sea area as well as to Turkey. (there's an interesting thought for CEM in his Blogs!)
With regards to security of energy the parallels also exist through the support of connecting the North African area to the EU by including a reinforced High-Voltage connection from Morocco to the South Western EU to bring across the distinctive Renewable electricity that Morocco is intending to have set up through Concentrated Solar Power and Sea Turbines to augment the closing down of the Nuclear Industry in parts of the Northern area. This could also be enhanced by affording a positive link to Egypt so as to transfer the enormous quantities of its (so-called) natural gas reserves that are 8 times larger than those across in Asia and to bring this ashore through Greece and Italy - again to support that position of energy supplies and to reduce the nonsense of the reliance on the Nabucco-South Stream link that will place the EU at the mercy of these Asian Countries. Alternatively and of course though this gas in Egypt could be converted to electricity and equally transferred to the EU by a power grid connection instead.
One wonders though whether this current issue is not over-crowding some more fundamental issues about the provision of renewable fuels in the EU and for which prior comments have been made by Günther Oettinger in the needs for real issues about diverting funds away from those that are generated by Food Crops (such as the Vireol and Ensus projects in the NE England and the Abengoa project in Spain) and concentrating on the proper use of Biomass – partciularly from Waste – which we see happening in Finland and the UK/holland/Malta. If the correct identification of programmes was identified the benefits to local issues across the EU would be far better for the general economy than concentrating all the efforts on a limited number of mega-projects.
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