As the European Investment Bank has not been an effective tool in a previous attempt to create a massive investment package, this time, a new instrument needs to be created, MEP Maria João Rodgrigues told EutrActiv in an exclusive interview.
Maria João Rodgrigues is Vice Chair of the Socialists and Democrats group, a Member of the Committee on Employment and Social Affairs and substitute member of the Committee on Economic and Monetary Affairs.
She spoke to EURACTIV’s Senior Editor Georgi Gotev.
You have just tabled together with other members of your group an alternative proposal to the expected €300 billion investment plan which Commission President Jean-Claude Juncker is expected to present next week. I have the feeling that you are trying to help Juncker. Am I right?
No, we are trying to help Europe, because we think Europe is in a very difficult situation, running the risk of a long period of stagnation, of mediocrity, of high unemployment, of big divergences, which are not only financial, economic, social, but political. And this would undermine the European project.
We think that we need a turning point, and in order to have one, we need a big push coming from investment. We need investment-led recovery.
Two years ago, EU leaders agreed on an investment package of €12 billion, but to my knowledge nothing happened. Why should we be more optimistic today, even if the amount is bigger?
Indeed, this Compact for growth and jobs had a quite disappointing outcome, because it could not deliver the big push for investment and job creation we were waiting for. The reason for this are the limits of the European Investment Bank capacity, because this package was relying on EIB. As we know, EIB is keen on keeping its AAA rating. We need to respect this, but this also means that we need to create something new, a new European instrument. This instrument should be designed to be a complement of EIB, able to provide funding to projects which are strategic, but cannot find funding either from private banks or the EIB.
Do you think you could find common ground with Mr Guy Verhofstadt, the leader of liberal group, who is also pushing for a more ambitious plan, or are you running on separate tracks?
I think we have a different approach. We have some problems with Mr. Verhofstadt’s proposal. First, (it) is that he is not explaining how can he build a European investment instrument. He refers to initial capital, but he is not saying what is the origin of this capital, who will pay for this capital. But if the capital would come from member states, this would mean higher deficits. The second part of his proposal is to provide tax incentives to companies which are available to invest. But look, I don’t think this is the right priority. Taxing incentives across the board would again increase the deficit. We think that if you want at the same time to reduce the deficit, and we want to reduce the deficit, and at the same time to relaunch growth, we need another kind of solution. Whereby we build a new European instrument for investment, but we say from the beginning that the national contributions for this instrument should be excluded from the deficit and from the debt. This is a completely different kind of solution and much better than of Mr. Verhofstadt.
But some countries will simply say they are not interested. What will happen then?
We should start with all member states willing to cooperate with this initiative. I’m quite optimistic, because our instrument is designed in such a way that very soon, many member states will understand it’s in their interest to participate in it. By using this instrument, they really can finance strategic projects that are crucial for them, in areas such as energy efficiency, renewable energy, supporting SMEs, innovation and human capital.
How do you respond to those who say critically that the proposed instrument is aimed to bypass the Stability Pact?
I don’t consider that this is about bypassing the Stability Pact, because we also need to have a credible fiscal policy. And we need to have fiscal consolidation. Our solution is creating the conditions to bring down the deficit and the debt, and let me be clear why. First, because we exclude national contributions to the European instrument from deficit and debt, but also because we will foster growth. And with this double effect, we can reduce the debt-GDP ratio. It’s a much smarter solution.