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The head of the European Investment Bank said that reforms in the European Union member states are “urgently needed” if Jean-Claude Juncker’s €315 billion investment fund is to succeed.
Werner Hoyer, the president of the European Investment Bank (EIB), said that there is enough private capital in Europe to support the fund, which is the brainchild of the European Commission president, but many investors lack the confidence to support “risky projects” that would help stimulate the EU’s economy. In order to change that, Hoyer said Europe should become more “business friendly, and reduce bureaucracy and red tape”.
Hoyer called Juncker’s plan to revive growth a “bold move”, but warned that it “will run into a vacuum if it is not accompanied by ambitious reforms in the member states”.
There are currently around 2,000 projects on the list for funding, but according to Hoyer many “will not see the light of the day” because of a lack of appropriate legislation in the member states.
Without contributions from member states, the fund – the European Fund for Strategic Investments (EFSI) – will be reliant on €16bn from the EU budget and a €6bn contribution from the EIB. The EFSI’s management board is in place, although a special investment guarantee committee, which will look into the eligibility of the projects, has not yet been set up.
Hoyer said that the EIB will start to look into the projects straightaway, in order to speed up the process and to unlock private investment. But he stressed that in order for the EFSI to operate properly, many more staff will be needed.
Speaking at a press conference looking at the EIB’s work in 2014, Hoyer said that the EIB is ahead of schedule on commitments made to the member states to mobilise €180bn in investments. This will take place in March, nine months earlier than expected.
In 2014, the EIB signed loans worth €77bn to support investment across Europe and around the world. Spain was the largest beneficiary of the EIB’s long-term funding with €11.9bn in loans, followed by Italy with €10.9bn, and France with €8.2bn.
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