Tuesday, 27 January 2015

The Juncker plan - a supranational try

Unemployment, bailouts, austerity, growing eurosceptisim - EU needs investments to foster growth and economic recovery. But how ? In November last year the Commission presented a new tool they had invented. A € 350 billion investment plan - "The Juncker Plan". Compared to the Cohesion funds the Juncker plan is different in several ways.

Firstly the plan will use EU money as guarantees for risky investments, while the Structural Funds are about project-financing. The European Investment Bank (EIB) will be central to the implementation of the plan, and Werner Hover, President of the EIB, just said the intiative "marks a paradigm shift in the use of limited public resources, away from grants and subsidies, towards loans and guarantees."

The new investment plan will also have a more supranational management than the Structural funds. A steering board will take alle the decisions on the overall direction, the investment guidelines, the risk profile, strategic policies and the distribution of assets of the fund. From the beginning, the board will consist of members from EIB and the Commission - the founders of the fund, and when other contributors appear, they will have votes defined on the basis of their contributions. The decisions will then be taken via simple majority.

Another difference from the Structural funds is that the Juncker fund will not have earmarking for certain sectors or regions. The selection-criteria are still not ready, but will be created together with investments guidelines for approval of projects when the fund is established.

Bulgarian "InEurope" has a good review of the new fund by Adelina Marini.

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