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The 315 billion euro, three year investment plan is not ambitious enough for some member states, including France, who had originally called for a programme worth 1200 billion over four years. At present, only 2 billion euros from the European budget have been pledged to the fund.
€6 billion taken from ongoing programmes
The EU plans to provide the investment fund with a total of 8 billion euros, 6 billion of which had already been budgeted for the research support programme Horizon 2020, and the European Interconnection Mechanism (EIM), dedicated to developing European transport networks. These €8 billion are designed as a guarantee to secure a further 8 billion in contributions from the European Institutions, and the European Investment Bank will contribute a further €5 billion, bringing the investment fund’s initial capital to 21 billion euros. From this modest starting point, the Juncker Commission is counting on a fifteenfold "multiplier effect" to reach the €315 billion it has promised.
This gamble is based on the assumption that a private investment will be more efficient, and more likely to be profitable, than a public investment.
Robbing Peter to pay Paul
The fund's participants are under no illusions: this new mechanism will not increase the total budget, and may well mean robbing Peter to pay Paul. The example of the Seine-Nord Europe Canal, one of France's major ongoing infrastructure projects, illustrates this situation. The project will cost 4.5 billion euros, of which the EU had committed to contribute 60% from European Interconnection Mechanism (EIM) funds. But the EIM's 5 year budget of €23 billion is due to be cut by 3.3 billion euros, in order to capitalise the Juncker investment plan.
A nebulous programme
The budget for the Seine-Nord Canal, which is one of Europe's top five infrastructure priorities, along with the Lyon-Turin train line, could remain unaffected. But nothing can be taken for granted, and the new investment fund is still as vague as ever. France did not include these two projects in its list of proposals for Juncker plan funding, precisely because Paris would prefer them to continue being funded by the EIM, but the Lyon-Turin train line did appear on the Italian list.
Karima Delli, a French MEP, pointed out that the investment plan would "represent 16% less funding for European transport projects over four years". She added that "what should have been an investment is really another cut to the European budget, which has already suffered massive reductions under the policy of austerity that continues to guide the Commission".
Members of the European Parliament are broadly in favour of the investment plan, but would prefer to have a greater say over it. The new European Fund for Strategic Investments (EFSI) will be placed in the hands of the European Investment Bank (EIB) and administered by a panel of financial experts and representatives from the EIB and the Commission.