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The European Investment Bank (EIB) and the EU's main national promotional banks, including Germany's KfW and France's Caisse des Depots, gave their view in a letter to be addressed to the European Commission.
The letter said public guarantees should be available below market prices to make the investment plan of Commission President Jean-Claude Juncker work, said Franco Bassanini, head of Italy’s promotional bank Cassa Depositi e Prestiti.
"Were these guarantees considered as illegal state aid, we can forget about the Juncker plan," Bassanini told journalists, arguing that the riskier projects funded with the plan needed favourable treatment or would be shunned by investors.
The EU commissioner in charge of the plan, Jyrki Katainen, said on Monday talks were ongoing to clarify how state aid rules would apply to the Juncker plan, an investment scheme intended to use leverage to generate 315 billion euros (227 billion pounds) of investment in Europe over three years.
National promotional banks of Germany, France, Italy, Spain and Luxembourg, have said they would be ready to contribute billions of euros to projects financed by the European Fund for Strategic Investment (EFSI), the vehicle to be set up by the Juncker plan, but only for projects in their own countries.
The European Commission would have preferred national contributions to go directly into the EFSI's coffers because that would increase the leverage effect of the fund, which has capital of 21 billion euros.