Polish minister calls for €700 billion EU investment fund

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".