The Vice-President of the European Investment Bank, Philippe de Fontaine Vive, told EURACTIV France he plans to start financing Juncker plan projects even before the legal framework is finalised.
Philippe de Fontaine Vive worked for the French Finance Ministry and the World Bank before moving to the European Investment Bank in Luxembourg in 2003, where he is Vice-President.
The Juncker plan was announced last July. What stage is it at now?
We saw the draft regulations from the European Commission on how they planned to implement the investment plan. The board of governors of the European Investment Bank will give its recommendations for the execution of the plan on 17 February. Next it will be up to the Finance Ministers to develop the plan to suit the member states. It will then be passed to the European Parliament to complete the trilogue.
When will the first euros be allocated?
Our objective is to have the system up and running by the end on 2015, but the EIB will not wait for the end of the year. We are ready to release the funds in advance, to start “warehousing” while the legal framework of the Juncker plan is being drawn up. We are already starting work on some projects. The EIB will begin by funding projects with its own money, and these will be transferred to the Fund for Strategic Investments as soon as possible.
And what is the situation in France?
In France, I met with all the French banks and I told them we were ready to consider any project that is both a priority for the EU and which represents a higher risk than the projects normally financed by the EIB. We are working quickly; but it is normal that the Commission and the Parliament should take the time to examine the system in detail.
Which projects will be financed under the Juncker plan?
When the Juncker plan was launched, some doubts were expressed over whether there would be enough projects in Europe that needed financing. So we asked the member states to give us ideas, and we saw that there was a real need for investment in Europe. The states each gave us a list of potential projects. But this list is not finalised; the plan will last for three years, and if a company comes up with an innovative patent in late 2015 and needs funding in 2016, we will be there.
How can the EIB take more risks and still preserve its triple A status?
The mechanism is simple. We stay in constant contact with the promoters of the various projects. Either their project conforms to our criteria and we finance them, or it doesn’t, in which case we turn to the Fund for Strategic Investments to guarantee the project. So the European budget shoulders the risk that we would otherwise not have taken. This reduces the risk for all the investors.
Does that mean that the European budget will be used to fund high-risk projects?
This is what is being discussed at the moment: a risk analysis will be done for each project. The acceptable level of risk of default will have to be evaluated by the European Commission and the participating states.
Project bonds established an initial round of “Juncker” projects. What was the result?
We had €230 million to use as a guarantee for projects in telecoms, energy and transport.
We used them to guarantee bond issues for seven or eight projects, including a high-speed internet pilot in France, with Axione, and the construction of wind turbines in the United Kingdom. In Spain, the government decided to abandon the Castor gas storage project due to seismic activity. All the investors were reimbursed by the Spanish government.
Finally, we have a series of transport projects, such as road interconnections, but also the extension of the port of Calais, which could be subject to a bond issue, a guarantee or project bonds.
You carried out a “pilot” Juncker plan in Greece. How did that go?
Structural funds have to be co-financed by the state, but the Greek debt crisis made this impossible. So we asked the European Commission and the Greek government to raise a guarantee fund of €500 million. This fund acts as insurance against loans we have made to four Greek banks, which in return have financed projects in Greece.
The idea behind the Juncker fund is similar, and it is a revolutionary change in EU culture: we have moved from subsidies and charity to a more economically efficient way of thinking.