Juncker's plan: Making €60bn worth five times more

The rest is due to come from private and public sector top-ups.

The financial engineering goes even deeper, however.

The €60 billion in loans will be raised on the financial markets based on €5 billion of the EIB's own money and a €16 billion "EU guarantee" issued by the commission.

This, in turn, is also only half real money - €8 billion from unused and reserve EU funds.

An independent "investment committee" consisting of "experts" will have the last say on each project, which will be picked from a list submitted by member states.

The experts will "validate every project from a commercial and societal perspective".

This is an attempt to avoid having unnecessary roads and airports being funded, as happened with some of the EU's structural funding schemes.

EU officials on Tuesday downplayed the risk that all of the EU-guaranteed loans might go 'sour' - going to projects that go bust.

But if they do, the EIB could call on an €8 billion "reserve”, and, possibly that EU member states would have to cough up the remaining €8 billion in the EU guarantee.

"Projects don't go bankrupt on the day they are signed and they will not occur at the same time. If there is a cash call on the guarantee, it will happen over time," one EU official said.

"The probability to call on the €8 billion in one go is infinitely small. Although I might regret having said this," the official added.

However, it is primarily "high-risk" parts of the public-private projects that this new fund will be covering, in a bid to attract public and private investors who otherwise would consider the overall project too risky.

Overall, the new initiative is projected to boost the EU economy by €330-€410 billion and to create over 1 million jobs over the next three years. This would correspond to a yearly GDP increase of 0.7 to one percent.

Economists are questioning the numbers behind the fund however.

Ronald Janssen, an economic adviser with the EU trade union movement (ETUC), told this website there are several questions surrounding the plan.

One is if the EIB board where member states are represented will approve this scheme, which, given the high-risk investments, might dent the bank's triple-A rating.

Another question is if the markets will be willing to step in and raise the remaining €240 billion.

"We have some doubts about that. If it works, all the better, but given what has been happening on financial markets, the risk aversion is still high," Janssen said.

A member of the European Court of Auditors also questioned the viability of the scheme.

“I am eager to see the details on how he will find the money for this €300 billion investment feasibility instrument, or whatever it is called,” said ECA member Igors Ludborzs.

In its last annual report, the Court found that only 37 percent of the funds from other financial engineering instruments actually went to the beneficiaries.

Meanwhile, Constantin Gurdgiev, a finance lecturer at Trinity College Dublin, spoke of "Santa Juncker".

"The idea that the EU commission is going to engage in 'risk lending' is about as probable as the idea of government-led entrepreneurship," Gurdgiev told this website.

"Career EU bureaucrats asking career member states' bureaucrats to invest in productive businesses - the initiative looks more like a redressing of the structural funds model to hit the policy fetish for 'supporting the real economy'," he added.

Long-time EU insiders also question the scheme, which was first announced as a political promise during Jean-Claude Juncker's election campaign.

"It achieved its goal, Juncker is on the 13th floor of Berlaymont [the EU commission headquarters]," one EU source quipped.