The European Commission and China have concluded technical work allowing Beijing to start pouring up to €10 billion under the so-called Juncker Plan, euractiv.com has learned.
Brussels and Beijing set up a working group last September in order to find the best solution to channel the big sum of money that China was ready to offer.
According to EU officials, the figure would range between €5 and €10 billion.
China was the first non-EU country to announce its contribution to the plan, although it was unclear what was the best technical option to facilitate its involvement.
After months of talks between the two sides, the EU and Chinese authorities have agreed that Beijing will contribute to the European Fund for Strategic Investments (EFSI) via its Silk Road Fund, a public fund.
This means China will have to fulfill the same rules applicable to private investors, a Commission official explained. In addition, China will have to meet all EU rules on public procurement, labour law or environment regulations when investing under the scheme.
“There will be no special treatment for Chinese investment,” the official insisted.
Project selection set to start
It is now up to the Chinese government to start selecting projects among those already filtered by the EFSI. The EFSI is the EU’s guarantee scheme aimed at mobilising at least €315 billion in private investment until 2018. So far, the instrument has attracted investments worth €82 billion, officials say.
If China finally decided to contribute with €10 billion, it would be the largest contributor to the Juncker Plan since it was launched last autumn. To date, the biggest national contribution has come from the United Kingdom, with €8.5 billion.
The European Commission official ruled out that the slowdown of the Chinese economy could affect China’s appetite to invest in Europe, as the country still needs to invest in attractive projects to maximise its returns.
Although China was the first non-EU country in announcing its interest, other foreign investors have shown interest in the EFSI scheme since talks began with Beijing. According to the officials involved, investors from the US, Canada and the Middle East are already taking part in the Juncker Plan, although they did not give details on the specific figures or projects.
“Better than expected”
The executive is satisfied with the results seen since the investment plan started in Europe seven months ago. The Commission believes that the participation of small and medium-sized enterprises has been particularly successful.
Around €3.4 billion have been allocated to SMEs in Europe through 150 financial intermediaries (such as banks or hedge funds), benefiting some 136,000 small businesses in 25 member states, officials said.
“This is better than expected, because we have achieved in one year what we expected to see until 2018,” the official said.
However, the European Commission would like to bolster its communication campaign to attract more projects, in order to break the “false perception” of complexity linked to the EFSI.
The promotion of some ‘success stories’, like an energy efficiency plan in France, or a plant to recycle titanium, could have some “contagion effect” and help to attract more innovative projects, the executive believes.
Given the steady progress made to date, officials are considering extending the investment plan beyond 2018, as was initially contemplated when the plan was launched.
Member states including Italy, France and the UK regard this option favourably, the Commission official said.