7th Jul 2020

Infrastructure scheme set for go-ahead before EU summit

A pilot phase for European infrastructure projects - part of plans to kickstart growth in Europe - is expected to be agreed ahead of a mid-week meeting of EU leaders in Brussels where jobs and the economy take top billing.

The Danish EU presidency is to agree a deal with the European Parliament on Tuesday (22 May) on the introduction of so-called project bonds from 2012 to 2014.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The project bond scheme - designed for infrastructure - will be temporary for now (Photo: cosmo flash)

The temporary scheme would use €230 million of unspent EU money, plus money from the private sector and the European Investment Bank in future infrastructure projects.

The deal would be the first concrete EU growth initiative since Socialist Francois Hollande took over as President of France earlier this month. His election shifted the nature of Europe's economic debate away from its sole focus on austerity measures.

A project bond agreement would also come on the eve of an informal meeting of EU leaders to discuss employment and growth in the economically battered Union.

Although the meeting is happening at a time when the eyes of the world are once more fixed on the eurozone, the discussions - held over dinner - are not expected to deliver any concrete decisions.

In his invitation letter, EU Council President Herman Van Rompuy stressed that as the meeting is informal so that EU leaders can have "as open and frank an exchange as possible."

Among the growth-making measures likely to be discussed are increasing the funds of the European Investment Bank (EIB) and the better use of EU structural fund money.

The funds increase for the EIB is seen by several member states as an easy way of promoting growth as extra money sent to the bank is not counted as part of a member state's deficit. But detractors fear that the bank's top credit rating risks being downgraded if it becomes involved in more, but less worthy, projects.

The EU commission, for its part, is also pushing for "unspent" structural funds to be put to use. But this is also proving to be controversial. What the commission sees as "wasted money," noted one senior EU diplomat, finance ministers see as "saved money."

"We can move things forward so that we can take decisions in June," said Van Rompuy referring to the EU's traditional summer summit.

One reason for the decision-free outcome of Wednesday's meeting are the forthcoming parliamentary elections in France and Greece's second election.

France's parliamentary election means that Hollande will be politically unable to make any compromises on Wednesday.

He has already indicated that he will raise the issue of mutualising eurozone debt - a no-go for Germany - and focussed much of his electoral campaign on a promise to open Berlin's budget-balancing fiscal compact treaty.

Meanwhile, Greece is in caretaker mode ahead of the 17 June election, which some EU leaders have billed as a referendum on the country's continued membership of the single currency after a majority of voters rejected the tough conditions attached to its bail-out.

While the French and Greek votes loom next month, there is also a sense that ideas which have previously been aired and dismissed might be on the table again.

These include eurobonds, changing the role of the European Central Bank to focus more on growth, and allowing the eurozone bail-out fund to directly recapitalise banks

"In light of the new direction coming out of Paris, all of these issues will be getting a new hearing," said the EU diplomat.

For his part, Van Rompuy wrote: "It is not too early to think ahead and to reflect on possible more fundamental changes ... In many ways, the perspective of moving towards a more integrated system would increase confidence in the euro and the European economy."

Obama presses EU leaders on growth

A weekend summit of G8 leaders stressed the need for the eurozone to focus on keeping Greece inside the euro. But plans are reportedly being drafted to deal with its potential exit.

EU plans tougher checks on foreign takeovers

The EU and its member countries are worried that foreign powers, such as China and its state-owned companies will take advantage of the economic downturn and buy up European firms

Vestager hits back at Lufthansa bailout criticism

Commission vice-president in charge of competition Margarethe Vestager argued that companies getting large capital injections from the state during the corona crisis still have to offset their competitive advantage.


EU leaders to reconvene in July on budget and recovery

Most EU leaders want an agreement before the summer break, but the Dutch PM, leading the 'Frugal Four', warned there might not even be a deal then. But the ECB's Christian Lagarde has warned of a "dramatic" economic fall.


EU leaders seek to first narrow differences at summit

EU leaders on Friday will share their takes - online - on the €750bn recovery and €1.1 trillion budget plans, before they try to seal the deal at one or two likely head-to-head meetings in July.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. Commission chief under fire for Croatia campaign video
  2. Parliament vaping booths 'too confidential' to discuss
  3. Belarus: Inside Lukashenko’s crackdown on independent voices
  4. The rationale behind US troop withdrawals from Germany
  5. Podcast: Nordic region speaks out on big global challenges
  6. Croatia re-elects PM amid corona downturn
  7. Budget talks shift gear This WEEK
  8. Cardinals speak out: EU needs corporate due diligence

Join EUobserver

Support quality EU news

Join us