Leading scientists criticise Juncker investment plan

However, the €8bn Commission cash is not actually new money but merely transfers from other key budgets.

An internal Commission memo sent last week to 28 European finance ministers ahead Tuesday meeting indicates it is almost certain that Commission President Jean-Claude Juncker’s plan will mean deep cuts to some budgets.

It states that the proposal to finance the initiative by slicing €2.7bn from a budget previously earmarked for research and innovation has received “unanimous support” from member states’ officials.

The commission argues that the proposed cut represents only 3.5% of Europe’s innovation programme and that its most recent seven-year settlement was substantially higher than the previous period.

It adds that investment in innovative projects will actually increase once the new Investment Plan is up and running.

Protests

But scientists, researchers and engineers from some of the continent’s leading university groups including Academia Europaea, EuroScience and the League of European Research Universities (LERU) have expressed concern at the move.

Peter Tindermans, secretary general of EuroScience, an umbrella group for research professionals, said it undermines trust.

“Scientists and technologists have been geared up to an increased commitment by the EU to research and innovation. Cuts represent a breach of trust,” he told the The Bureau of Investigative Journalism.

“This will create doubts among European researchers, and significantly researchers outside Europe about whether Europe is after all a very good place to do research,” he added.

Professor Sir John Walker, a Nobel prize winning chemist at Cambridge University who is one of the signatories to a letter to the Commission.

“If the proposals were to be implemented they would cause immense damage to the EU science effort and seriously undermine long-term economic recovery based on knowledge and invention,” he said.

Horizon 2020

Among the organisations facing the biggest cut is the European Research Centre. It has a budget of €1.7bn this year but is now in line for a €90m reduction and €221m over five years.

Europe’s space programme will see an €80m cut while a funding package for nanotechnology, advanced materials, laser and biotechnology is set for a €169m reduction.

In addition to the €2.7bn, the rest of the €8bn needed will come from a €3.3bn cut to the Connecting Europe Facility transport budget, and €2bn from what is describes as “unallocated margin” – unspent EU cash from its €960bn seven-year budget to 2020.

What next?

The Juncker Plan is still in its infancy but a number of finance roadshows to try and attract private sector finance have already taken place.

In December member states submitted a 600 page document of possible projects requiring €1.2trillion to build.

The majority of projects are linked to transport and energy. Projects will be scored for the number of jobs they generate, the growth they would yield and their anticipated profitability.

The plan is expected to result in major fee generating opportunities for banks.

Banks will be called upon to issue bonds on the back of promised income streams from new roads, ports, power plants and IT projects.

EU investment commissioner Jyrki Katainen, tasked with attracting investors to the plan, attended last month’s Davos meeting to promote it.

Katainen met officials from the Institute of International Finance – the world’s most powerful bank lobby organisation – Bank of America and Banco Bilbao Vizcaya Argentaria.

He also discussed the plan with Microsoft and BT Group who would benefit from work extending Europe’s broadband coverage.

Nick Mathiason works for the The Bureau of Investigative Journalism. Based at City University London, the Bureau works in collaboration with other groups to get its investigations published and distributed.