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24th Jul 2021

MEPs approve EU investment fund, want more say on how money is spent

  • Katainen is in charge of creating enthusiasm for the investment fund (Photo: European Commission)

The European Parliament has approved on Monday (20 April) the plan for an investment fund, but demanded some changes are made to where the money comes from and what the role of the parliament should be.

The European Commission had planned to redirect €6 billion from two already existing EU funds, one that was for improving the EU's infrastructure, the other for research and development, a proposal which was heavily criticized by scientists.

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Parliament decided to tell the commission that it “should find alternative resources to finance the guarantee fund”.

The fund, named after EU commission chief Jean-Claude Juncker, will consist of €16 billion provided by the EU budget, and €5 billion from the EU's investment bank.

It was introduced in Juncker's first month in office, last November. The commission expects the €21 billion to be supplemented by private investors, with the fund reaching a whopping €315 billion, to be spent in the next three years on projects that are hoped to revitalize the EU's economy.

The amended plan for the fund was adopted in the parliament's combined budget and economic affairs committee Monday with 69 votes in favour, 13 against, and six abstentions.

The MEPs also agreed to start negotiations with the national governments (71 Yays, six Nays, 11 Abstentions). The first round of talks is scheduled for Thursday.

“The talks between co-legislators should lead to an agreement as quickly as possible, allowing for final adoption this summer”, the responsible EU commissioner, Jyrki Katainen wrote in a statement.

“Practical arrangements are already under way to ensure that the EFSI becomes operational as quickly as possible and that funds start flowing to projects by September at the latest”, he noted.

The parliament also adopted an amendment to the plan that would give the legislature a larger role in the oversight of the investment fund, and of the so-called Investment Committee of independent experts which will decide which projects will receive funding.

While the commission had proposed that the EP would have the right “to organise at any time hearings with the [Investment Committee's] Managing Director”, the MEPs said they want the power to approve all members of the expert committee as well as the director.

Earmarking

One idea to make sure that the fund is used in particular to support projects that increase energy savings and those by small- and medium-sized enterprises, was dropped.

Last Tuesday (14 April), the EP's industry committee had adopted a mandatory earmarking of €5 billion for each of those two categories. But the joint committee that voted Monday rejected the claim by the industry committee that the latter had the sole right to decide on such earmarking, and overrode the amendment.

The power struggle that followed the diverging interpretation of competence was solved by the four committee chairmen before Monday's vote.

Industry committee member Claude Turmes, a Green MEP from Luxembourg, called the deal by the chairmen “a putsch”, because he suspects the EU commission has put pressure on the chairmen to remove earmarking from the proposal.

According to Turmes, the industry committee's chairman - a member of the same centre-right political group as commission chief Juncker - “didn't fight for it”.

Turmers subsequently withdrew the amendment from Monday's vote, because he had not had the chance to explain the amendment in a debate (Monday's meeting was only about voting on the amendments).

“I assumed until Wednesday (15 April) we would have had exclusive competence. I've been here for 16 years. This has never happened”, he said.

For Turmes, the scoreboard is only a weak alternative, as it is determined “ex post”, or “after the fact”.

“This doesn't replace a €5 billion fund which would have been a positive sign for investors” to invest in energy savings projects, the Green MEP noted.

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