The European Commission’s 300 billion euro plan to boost investment in Europe is not big enough and lacks details, German Economy Minister Sigmar Gabriel said on Monday (1 December).
The amount is “not only not enough” but it is not clear what the money will be used for, Gabriel told reporters in Berlin.
“I’m totally against putting up a stimulus programme,” he said, arguing it would be just a ‘straw fire’ and that at the end of the day the money would be gone and nothing lasting would come out of it.
Gabriel, who is also vice chancellor in Angela Merkel’s right-left coalition, added that Commission President Jean-Claude Juncker needs to come up with a “list of projects” that could be used to promote European unity, similar to spending to promote German unity after the end of the Cold War.
There would then be enough investors who would join in, said Gabriel. He said that European integration would not ultimately fail over the question of “do we have enough money,” he said – the more important issue was getting the right framework.
Juncker last week announced a 300 billion-euro plan he hopes will boost investment without adding to public debt, by leveraging private-sector cash with a 21 billion-euro fund to be managed by the European Investment Bank.
The proposal will be debated by the EU’s 28 national leaders in Brussels later this month.
The European Commission unveiled the mechanism for its much-heralded €315 billion investment plan on 25 November.
Details on the new fund reveal that the cash will be funnelled towards Europe’s crisis-ravaged south, away from the wealthier north 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.
The plan drew questions over the lack of new cash, with some Members of the European Parliament calling it "recycling and re-labelling" of existing programmes.
- 18-19 Dec.: EU heads of states to debate Juncker investment plan at European Council meeting in Brussels