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08/12/2016

Regional president confident of Juncker Plan flexibility

Regional president confident of Juncker Plan flexibility

SPECIAL REPORT: The Commission is prepared to consider flexibility for member states, in order to offset structural funds from their annual budgets under the Stability and Growth pact, where these are used to co-finance Juncker Plan projects (see background), according to the new president of the Committee of the Regions (CoR).

Such flexibility would address warnings voiced by political representatives of Europe’s regions that Juncker’s €315 billion investment plan could divert money away from the EU’s existing structural funds.

According to the Juncker Plan (see background), member states have been offered the opportunity to top-up amounts in the European Fund for Strategic Investments (EFSI) – which will act as the investment vehicle for projects.

The Commission has pledged that member state contributions to the EFSI will not be counted for the purposes of the stability and growth pact.

Elected President of the European Committee of the Regions (CoR) with effect from this month, Markku Markkula – a member of the centre-right National Coalition Party of Finland – called for regional collaboration on the Juncker Plan projects in an interview with EurActiv.

Markkula: Juncker Plan should change the mentality of Europe

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EurActiv has previously reported that the European Council is mulling the idea of allowing member states to contribute to projects identified under the Juncker Plan using structural funds, and offset their share of co-financing such investments from their balance sheets within the European semester.

Read >> European Council mulls stability pact leniency

“Each [Juncker Plan] investment needs to be reviewed from the point of view of its impact, and the rules need to have flexibility. I have heard that the Commission recognises the need to be more flexible on this,” Markkula, the first Finn to head up a major European institution, said.

Markkula said that he wanted to bring about a “change of mentality” in the way the EU approaches regulation, with regional participation feeding into the decision-making process.

He also said that the CoR had a role to play in the Ukraine crisis, saying that regional experience should be brought to bear in helping Ukrainians to build decentralised government structures and to rebuild infrastructure damaged by the conflict.

Background

The European Commission unveiled the mechanism for its much-heralded €315 billion investment plan on 25 November 2014.

The cash is aimed at investments towards Europe’s crisis-ravaged south, in an effort to boost solidarity.

The idea is to create a new European Fund for Strategic Investments (EFSI), with €5 billion coming from the European Investment Bank and an €8 billion guarantee from existing EU funds designed to secure a contribution of €16 billion in total from the institutions.

The €8 billion guarantee will come over a three-year period from the Connecting Europe Facility (€3.3 billion); Europe’s research programme Horizon 2020 (€2.7 billion) and so-called “budget margin”, or unused funds, worth €2 billion.

The resulting EFSI fund totaling €21 billion is expected to generate €240 billion for long-term investments and €75 billion for SMEs and mid-cap firms over the period 2015-2017.

Further Reading