Goodbye Juncker plan, hello InvestEU, Europe’s new investment fund

Jyrki Katainen, vice president of the European Commission for Jobs, Growth, Investment and Competitiveness, during the presentation of the InvestEU fund. [European Commission]

The European Commission put forward a proposal on Wednesday (6 June) to bring all of the EU’s existing investment instruments under the banner of a new fund called “InvestEU” which will formally succeed the Juncker Plan.

“Thanks to a better economic environment, investments are picking up,” European Commission Vice-President Jyrki Katainen told reporters on Wednesday (6 June) as he presented the new fund. Even so, “more investments are needed,” and the EU has the instruments to push them forward.

InvestEU will follow up on the Juncker Plan, which aimed to mobilise public and private capital to address investment gaps in Europe.

Under the InvestEU banner, the EU executive will pull together up to 14 existing financial instruments under a single rule book and 13 assistance services will merge into a sole Advisory Hub.

The Commission will maintain the InvestEU portal to help European projects gain global visibility and attract potential investors.

“As a result, our financial instruments are easier to use for the beneficiaries,” Katainen argued. Simplification will also allow doing more with less, since “by pooling together the existing instruments can achieve 15% more investment,” he said.

'Juncker plan' mobilises €284 billion in investment

The EU’s investment fund set up in the aftermath of the financial crisis has mobilised €284 billion to date, mostly in private capital, surpassing the halfway point of its 2020 target.

Four policy areas

The Commission wants the InvestEU fund to provide a €38 billion guarantee to support investments across the EU. The guarantee will be provisioned at 40%, meaning €15.2 billion of the next long-term EU budget will be set aside in case calls are made on it.

The EU executive says this guarantee will mobilise €650 billion in additional investment across the EU over the 7-year period.

InvestEU will be managed by the Commission with the support of financial partners for its delivery. The European Investment Bank Group will remain the main one but national and regional banks or other institutions may become partners too.

Another novelty is that the instrument will focus on 4 policy areas which are key priorities for the EU. Up to €11.5 billion will be allocated to invest in sustainable infrastructure; €11.25 billion to research, innovation and digitisation and the same sum for small and medium-sized businesses. Finally, €4 billion will be provided for social investment.

Moreover, the initiative offers member states the possibility to channel up to 5% of Cohesion funds by policy area to the EU guarantee.

The Juncker Plan faced criticism because of its alleged lack of a regional dimension, and the Commission believes that including new financial partners – national or regional banks – should make it easier to serve local needs.

Furthermore, the executive expects to contribute to the regional dimension of the project by providing assistance in capacity building and development through the Advisory Hub to potential benefiters.

Money, however, is not the only way to improve investment conditions in the EU. “We have to keep moving on the structural reforms side,” said vice president Jyrki Katainen who praised the new Reform Support Programme presented by the Commission a few days ago.

‘Juncker Plan’ becomes friendlier to poorer EU members

The European Commission plans to improve the geographical reach of its flagship investment scheme popularly known as “the Juncker plan”, after the first year of its operation showed that mainly the richest 15 countries of the 28-nation bloc benefited from it.

Reactions broadly positive

The new InvestEU fund was welcomed by the European Economic and Social Committee (EESC), the EU consultative body representing social partners. “InvestEU Programme is a win-win exercise for the world of innovation, for the SMEs and for social investment,” said Luca Jahier, European Economic and Social Committee (EESC) President.

Jahier embraced in particular the Commission’s effort to streamline and simplify a wide variety of financial instruments and “for capitalising on local, national and EU wide expertise”. The EU executive’s proposal, Jahier said, “is an example of when and where Europe can make the difference.”

Environmental NGOs, however, were more dubious. “For InvestEU the European Commission proposes a 50% climate and environment target and ‘sustainability proofing’, which sounds excellent, but this will apply only to the infrastructure funding, and there is little detail on how sustainability will be ensured,” said Sébastien Godinot, an economist at the WWF European Policy Office, who called on the Commission to clarify that the new guarantee fund will not support fossil fuels.

Juncker Plan falls short of offering green projects, expert group says

The high-level group on sustainable finance proposed on Tuesday (18 July) a new platform to match capital and green projects, as the Juncker Plan did not develop the ‘big pipeline’ that was expected to unlock the money resting in the pockets of big investors.


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