The European Commission President Jean-Claude Juncker was full of good tidings.
He promised that Christmas had come early, in the form of his new €315bn (£250bn) investment plan aimed at kick-starting growth in the EU. But the festive mood did not stretch to all corners of the bloc, with critics complaining that he was conjuring up figures without actually spending any new money.
With EU unemployment remaining at a stubborn level of around 10 per cent and countries still struggling to return to robust growth after the eurozone crisis, Mr Juncker has been under pressure to come up with a radical plan to transform the bloc’s fortunes.
His speech to the European Parliament presented the investment package as exactly that: a bold move that would create new jobs and transform whole sectors of the economy.
“I promised to present an ambitious investment plan before Christmas – one month later and Christmas has come early: I am here to deliver on my promise,” Mr Juncker told MEPs in Strasbourg towards the end of his first month in the EU’s most powerful job. “Europe needs a kick-start and today the Commission is supplying the jump cables... We need to send a message to the people of Europe and to the rest of the world: Europe is back in business.”
The plan aims to use around €21bn of seed money already allocated for investment in the EU to guarantee loans by the European Investment Bank (EIB) worth about €60bn. The idea behind Mr Juncker’s plan is that private enterprise will then use the loans to generate investment worth €315bn.
But those calculations prompted Dimitris Papadimoulis, a Greek MEP from the European Left bloc, to say the policy was simply “business as usual – German-dominated austerity Europe”.
“This €300bn package that you promised is empty, it’s just empty words... there is not one euro of fresh money in there,” he said. “We need fresh money, we need new capital... if there are no public funds coming into the pipeline there is no growth and no recovery.”
Bernadette Ségol, general secretary of the European Trade Union Confederation, also questioned the maths and said she could not see how €21bn could be transformed into 15 times that amount in the space of three years. “The European Commission seems to be relying on a financial miracle like the loaves and fishes,” she said in a statement.
The EIB head Werner Hoyer countered claims that the EU was playing “magician”, saying this was how banks work: “You take in loans from somebody who trusts you with his or her money and then you make more of it – this is what every bank does and we do it in a very sound way.” Mr Hoyer also said the target of €315bn could even be an underestimate of the amount of return on the initial investment.
While the left wing and unions stressed that they would prefer more direct investment and new funding, there was a cautious welcome from the main centre-left, centre-right and liberal groups in the European Parliament. The British Government also voiced tentative support for the plan and said it would examine the proposal carefully before its presentation to the 28 EU heads of government at the next summit in December.
“We believe that encouraging private investment and growth-promoting measures are a vital part of securing recovery in the EU economy and ensuring the EU can compete globally,” a British diplomat said.Reuse content