2nd Dec 2023

EU investment plan to 'run into vacuum' if no national reforms made

  • Werner Hoyer presented the EIB annual report in Brussels (Photo: Council of European Union)

Member states have put "arbitrary" projects on their wish-list for the €315bn Juncker plan, EIB chief Werner Hoyer said Monday (23 February).

The Juncker investment plan can be a "part of the jigsaw", Hoyer said, but he warned that the plan "will run into a vacuum if not accompanied by reforms" at a national level.

Read and decide

Join EUobserver today

Become an expert on Europe

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

... or subscribe as a group

EU commission chief Jean-Claude Juncker later in the day during the launch of the EIB Brussels office also said that the plan is not the "solution to all European problems."

"This plan will be a total failure without budgetary consolidation, structural reforms and cutting red tape," Juncker added.

Hoyer said governments had caved into the "temptation to put projects which will never be funded”.

He said merit-based selection is key for private investors to chip in as well, and warned against attempts to politicise the process.

"If we consider a project viable, others follow. We will reject any proposals that will politicise this," Hoyer said.

The €315bn fund is the flagship project of European commission president Jean-Claude Juncker, and is meant to boost growth and jobs in the EU.

Asked why setting up a new fund was needed, rather than just giving more money to the EIB as such, Hoyer explained that the situation had changed compared to 2012.

Back then, there was no money in banks, companies or private investment funds.

Nowadays, Europe is flush with money, but investors are cautious because of "lack of confidence, bureaucracy and a lack of good projects," he said.

Hoyer said he completely supports the Juncker fund - formally known as the European Fund for Strategic Investments - which will be set up within the EIB and is likely to become operational in September.

The core idea of this fund is to remove the riskiest parts of infrastructure, start-up and energy projects so that risk-averse investors will consider putting money up.

He said extra investments in research, energy, transport and digital infrastructure were key, as there is a "huge gap" between Europe’s targets and what has actually been earmarked in national and EU budgets.

Hoyer spoke of an additional €130bn in R&D, €100bn in energy connectors and €55bn in digital infrastructure needed per year to meet the EU's own goals.

He defended the "leverage" factor which has the EU commission counting on €1 in the fund leading to €15 in investment.

The actual money earmarked for the fund is a €16bn guarantee from the EU budget and €5bn from EIB's own money.

When the EIB got a cash injection of €10 billion from member states (who own the bank), back in 2012, it promised to leverage the money 18-fold and increase lending for infrastructure projects as well as small- and medium-sized businesses.

Hoyer said that not only has the target been achieved, but it will have reached €180 billion in March, nine months earlier than anticipated.

Asked if the EIB was considering increasing its lending to Greece, Hoyer said the bank's exposure to the debt-ridden country was already €16.9 billion, representing 9.4 percent of its GDP.

"This is topped only by Hungary, Slovakia, Portugal and Cyprus," he said, adding that for more EIB investments, good projects are needed in Greece.

The EIB president said he expects another 300-500 staff to be hired to sift through the more “granular and risky” projects up for funding.

The Luxembourg-based bank currently has 2,000 employees, a "lean structure", said Hoyer, compared to the World Bank, which has 18,000.

Brussels denies having no 'concern' on Spain's amnesty law

The Spanish government remains secretive about its negotiations with pro-independence Catalans, but claims the EU Commission has "zero concerns" about their proposed amnesty law for Catalan separatists. The EU executive denies that.


'Pay or okay?' — Facebook & Instagram vs the EU

Since last week, Mark Zuckerberg's Meta corporation is forcing its European users to either accept their intrusive privacy practices — or pay €156 per year to access Facebook and Instagram without tracking advertising.

Latest News

  1. Israel's EU ambassador: 'No clean way to do this operation'
  2. Brussels denies having no 'concern' on Spain's amnesty law
  3. Dubai's COP28 — a view from the ground
  4. Germany moves to criminalise NGO search-and-rescue missions
  5. Israel recalls ambassador to Spain in new diplomatic spat
  6. Migrant return bill 'obstructed' as EU states mull new position
  7. Paris and Berlin key to including rape in gender-violence directive
  8. What are the big money debates at COP28 UN climate summit?

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us