Wednesday

7th Dec 2022

Polish minister calls for €700 billion EU investment fund

  • The EIB should be put in charge of a €700 billion EU investment programme, Poland's finance minister Mateuesz Szczurek has said. (Photo: EIB)

The EU should establish a temporary investment fund capable of paying for infrastructure projects worth €700 billion, Poland's finance minister has said.

In a speech at the Bruegel think-tank on Thursday (4 September), Polish finance minister Mateusz Szczurek called for EU leaders to task the European Investment Bank with creating a special investment fund aimed at directing private savings and pension funds towards pan-European infrastructure projects related to energy, transportation and ICT.

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

He added that Europe needed to make public investments worth €700 billion, over the next five years, equivalent to over 5 percent of its economic output.

"To start operating, the new vehicle would require a gradual injection of paid-in capital and guarantees by all EU member states, in a similar way and on the similar scale as was done for the European Stability Mechanism (ESM)," he stated.

The ESM, which serves as the eurozone's permanent bailout fund, has €80 billion of paid-in capital from governments, allowing it to, theoretically, raise up to €500 billion from the financial markets.

Allowing the European investment Bank to operate in a similar way would keep the extra spending off government balance sheets, making it easier for them to comply with the EU's budget deficit rules.

"The capital of the fund would be leveraged by borrowing in the financial market and directly invested in the selected infrastructure projects because Europe needs actual capital expenditures, not merely extra funding," Szczurek said.

Szczurek is one of the first ministers to offer a plan on how to beef up investment in Europe to boost the bloc's stagnating economy.

For his part, incoming European Commission President Jean-Claude Juncker has promised to set out €300 billion investment package when his new team takes office later this autumn.

Meanwhile, at a hearing on Thursday (4 September) with MEPs on the economic affairs committee, Dutch finance minister Jeroen Dijsselbloem, who chairs the group of eurozone finance ministers, said ministers would compare respective plans to cut labour taxes when they meet in Milan next week.

Ministers have agreed to reduce the so-called 'tax wedge' - the difference between the wage costs of a worker to their employer and the amount of 'take-home-pay' when taxes and social security contributions have been deducted.

The average real tax rate faced by European workers currently stands at 45 percent, far higher than the OECD average of around 35 percent.

Research by the European Commission claims that shifting taxation from labour to consumption by the 18 euro area countries could add €65 billion to output and create 1.4 million jobs over the next decade.

On Thursday, ECB president Mario Draghi said that prohibitive tax rates would hurt the eurozone economies regardless of how much credit was available to businesses.

"We can provide as much monetary stimulus as we want, but if the person who plans to use this credit for a new business has to wait eight months before he or she can open this new business, and then.. has to pay lots of taxes, this person will not apply for credit," Draghi told a press conference following a meeting of the ECB's governing council.

The eurozone's economic recovery had become "very fragile and uneven", Dijsselbloem noted, adding that the "fundamental challenges faced by the euro area are unchanged".

Katainen vague on €300bn investment plan

Tuesday's EP hearing of Finland's Katainen, one of seven new super-commissioners, shed little light on where the money for a vaunted €300bn investment plan will come from.

Exclusive

Borrell gets pension from MEP fund set for taxpayer bailout

Josep Borrell, the EU's foreign policy chief, is currently drawing a pension from a European Parliament fund that is some €400m in debt and may require a taxpayer bailout at a time of rising inflation and high energy costs.

Column

Autocrats make us all less secure

How should democratic states co-operate with authoritarian governments in the future? My organisation, Democracy Reporting International, has studied the security strategies of 13 democratic governments to understand how they see this relationship.

Column

Autocrats make us all less secure

How should democratic states co-operate with authoritarian governments in the future? My organisation, Democracy Reporting International, has studied the security strategies of 13 democratic governments to understand how they see this relationship.

Stakeholders' Highlights

  1. Nordic Council of MinistersLarge Nordic youth delegation at COP15 biodiversity summit in Montreal
  2. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  3. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  4. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  5. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  6. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe

Latest News

  1. EU delays Hungary funds decision, as Budapest vetoes Ukraine aid
  2. Borrell gets pension from MEP fund set for taxpayer bailout
  3. Autocrats make us all less secure
  4. Big Agri's lies: green EU farming not to blame for food insecurity
  5. German top court declares €800bn EU recovery fund 'legal'
  6. EU countries struggle to crack Hungary's vetos
  7. Frontex expanding migrant route-busting mission in Balkans
  8. EU ministers in fresh battle on joint debt, after Biden subsidies

Stakeholders' Highlights

  1. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  2. European Committee of the RegionsRe-Watch EURegions Week 2022
  3. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  4. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  5. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  6. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online

Join EUobserver

Support quality EU news

Join us