12th Aug 2022


EU to unveil investment fund this WEEK

  • Van Rompuy (l) leaves the EU stage on Sunday (Photo: Council of European Union)

European Commission president Jean-Claude Juncker is to unveil his highly-anticipated €300bn investment plan next week (24-30 November) with most of the focus set to be on how much is 'new' money and how much is just recycled from existing funds.

The plan, announced by Juncker before he was elected into office, has taken on a significant symbolic importance as it is meant to be a way of kickstarting the struggling EU economy.

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But although the idea was welcomed from the offset, it was immediately dogged with questions about where the money would come from, and how much would be from the public and private sectors.

The commission has already indicated that it will include a recently-announced German public investment programme, of €10bn, in its calculations but has also said several times that the new funds should not create new debt in member states.

Meanwhile, the EU's 'growth pact', announced in 2012, casts a long shadow. It largely failed in its bid to generate growth and relied heavily on leveraging €10bn of new money for the European Investment Bank to give the pact its headline €120bn of funds.

The investment fund is set to be decided Tuesday (25 November) and formally unveiled before parliament on Wednesday. This gives time for the entire commission to attend a motion of censure against Juncker, filed by eurosceptics in the European Parliament, on Monday evening.

The no-confidence vote, being held because the threshold 76 signatures was reached, was filed in response to the LuxLeaks - a series of revelations about the extent Luxembourg enabled large companies to avoid tax. The scheme was set up when Juncker was prime minister of the Grand Duchy.

However Juncker - who has said he acted within the EU law - is expected to easily survive the vote as the two largest groups in the parliament - the centre-right EPP and the Social Democrats - as well as the Liberals have all indicated that they will support him.

French budget

The other major decision facing the European Commission is a budgetary one. The vast majority of eurozone budgets handed in last month raised no comment from the EU executive but Italy and France both received warning letters, prompting both to tweak their budgets in response.

However, France, which has said it will not bring its budgets under the EU deficit threshold until 2017, is said to be still in the firing line. The issue is highly politically sensitive as Brussels neither wants to raise anti-EU sentiment in France by punishing it with a fine nor does it want to be seen to be letting Paris off the hook when Greece, Ireland and Portugal had to jump through austerity hoops to lower their deficits.

On the eve of the decision, the issue became more politicised still when the German EU commissioner, whose portfolio is entirely elsewhere, took to the op-ed pages of the Financial Times to express doubts about Paris' reform zeal.

While the French budget decision is expected to grab the headlines towards the end of next week, Tuesday's headlines will be filled with something rather different: the pope's visit to the EP.

Pope Francis will address Strasbourg plenary in the morning, making it the first papal visit to the assembly since 1988. Also present in Strasbourg will be Matteo Renzi, Italian PM, to meet the pope. Renzi is another EU leader very much on Brussels' radar having made major reform promises when he came to power earlier this year but who has since been slow on delivering.

'Vaarwel' to Van Rompuy

At the end of the week, it will be 'adieu' or 'vaarwel' to Herman Van Rompuy, the EU council president, whose mandate ends on Sunday.

The former Belgian PM was the first ever to occupy the post, and put the accent on chairmanship rather than presidential style. His term in office was mainly marked by the euro crisis, which at the height of the turmoil, saw him organise a series of urgent summits as politicians struggled to find a coherent response to the real threat of a Greek exit from the eurozone.

His lack of political ego meant he never became part of the 'story' and will also likely be remembered for his fondness for Japanese-style poetry.

He has said he will retire completely from politics both at the EU and national level.

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