19th Nov 2018

Doubts raised about Juncker fund on first stop of PR tour

  • Katainen has begun a one-man 'roadshow' to sell the merits of the Juncker 'investment fund' in member states (Photo:

The European Commission’s growth fund has been described as relying on a “big bet” and falling just short of “financial engineering” on its first ever promotional outing.

The harsh judgement, by a former finance minister, came as EU commissioner Jyrki Katainen began a one-man 'roadshow' to sell the merits of the Juncker 'investment fund' in member states.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

His first stop, on Monday (15 December), was Romania, one of the EU’s poorest member states, to speak to a financial sector audience.

Explaining the details of the plan, Katainen said that the commission expects the initial €21bn - from the EU budget and the European Investment Bank - to enable lending to the tune of €63bn.

This in turn is supposed to attract "five times more resources" - leading to a total of €315bn over the coming three years - while the 'first heat" on any losses will be taken by the fund.

A "pipeline" of projects - so investors know where money is needed - as well as regulatory improvements to the digital, energy and capital markets sectors are also part of the package.

But questions from the audience showed the scepticism about the project.

Daniel Daianu, a former finance minister and a board member of the National Bank of Romania, said “an enormous amount of hope is being put on this plan and it is highly welcome.”

He added, however, that while he “would not go so far as to say it is financial engineering, the leverage ratio is pretty high” and that “substantially more” public money is needed.

Daianu, who has also been a Liberal member of the European Parliament, raised doubts about whether the “risk mitigation” in the fund would be enough to persuade investors, whose risk aversion is currently “so high”.

Katainen, for his part, admitted that the plan “with not change everything” but added that it would be up to member states to make it work.

“If the private sector does not want to invest in Europe, we have to ask why. One cannot outsource responsibility on improving competitiveness to the EU.”

Bogdan Olteanu, a vice governor at the National Bank of Romania, wanted to know if there would be any screening of potential projects on political or value grounds if proposals were not in line with EU “values”.

But Katainen ruled out "political" decisions - there has been talk of picking projects so they offer a balance of member states - saying that the private sector had told him that this would mean "no opportunity to attract investment any more".

How to get a job?

The former Finnish PM also spoke to students at the Bucharest Academy of Economic Studies and invited them to ask many questions so he could "learn" from them about what is needed in Romania and what there concerns are about the economy.

Having ascertained that there were no entrepreneurs in the audience, he fielded some questions on the economy, possible policy differences between euro and non-euro countries (Romania is not in the eurozone) and on South Stream, a just-shelved gas pipeline project backed by Moscow.

But it was notable that he spent a several minutes outlining how to get a job in the European Commission after getting questions about the qualifications needed and the best route to get into the relatively well paid public service job.

Katainen’s PR trip will continue in 2015 with trips to Italy and Germany in January – he will visit all 28 member states by October next year.

Meanwhile, the European Commission is hoping to round off this year with a big political endorsement for the fund from EU leaders at their in Brussels at the end of this week.

News in Brief

  1. Germany and France agree eurozone budget framework
  2. Austrian foreign minister: EU's Israel policy 'too strict'
  3. Soros and Kurz discuss Central European University move
  4. EU set to tighten rules on foreign strategic investment
  5. Macron repeats call for unified Europe in Bundestag speech
  6. US warns EU banks and firms against trading with Iran
  7. Merkel urged Romania not to move embassy to Jerusalem
  8. Protesters call for Czech leader to step down


An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Panic is not answer to EU's security challenges
  2. Dutch flesh out proposal for EU human rights sanctions
  3. EU cheerleaders go to Russia-occupied Ukraine
  4. EU must recognise new force for Balkans destabilisation
  5. Brexit dominates EU affairs This WEEK
  6. How the EU commission got tunnel vision on self-driving cars
  7. No-confidence calls against May put Brexit deal in doubt
  8. Key points of the Brexit deal (if it ever comes into effect)

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Mission of China to the EUChina: Work Together for a Better Globalisation
  8. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  9. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  10. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  11. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  12. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future

Join EUobserver

Support quality EU news

Join us