Thursday

23rd Nov 2017

Opinion

Look through an investor's lens, Europe!

  • European Structural and Investment Funds go to paying for roads like these. (Photo: Mikolaj Welon)

On February 14 the Polish government bet on investments, launching the Responsible Development Plan, an ambitious new strategy

It aims to raise the investment rate to 20-25 percent of GDP by 2020 and keep it at 25 percent by 2030. We aim to achieve this external and internal sources of funding.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The European Structural and Investment Funds (ESIF) and particularly the cohesion policy funds will play an important role in the implementation of our aims.

According to our estimates, they contribute to increasing investments by 2 percentage points. This gives us grounds to believe that the cohesion policy will have a further substantial influence on investors’ activity in Poland.

Moreover, one of the most important strategic projects is the best possible coordination of work of different ministries and governmental agencies when it comes to obtaining funds from the Investment Plan for Europe - the Juncker Plan or EFSI.

This is already taking shape – more than 30 projects, worth over €17 billion will be funded by the Juncker Plan.

There are different sources of funding at the EU member states’ disposal. The challenge now is to use them in a way that ensures more quality investments in Europe.

The solution seems obvious: combine them together, although with a certain degree of flexibility. But it is not an easy task.

Make the most of EFSI and ESIF

The Juncker fund was created two years after legislative instruments for cohesion policy, therefore the ground rules for those two tools are different.

Currently, a potential investor in need of EU support has to talk to at least two officials in two separate entities. The lack of a common, coherent offer is acting as a deterrent.

At the same time, investors are faced with difficulties and hurdles, instead of making the most of what EFSI and ESIF have to offer.

This is the lens through which we should look at this problem.

The investor is the one taking the risk and making the whole effort.

An opportunity to change the current state could occur along with the review of the Multiannual Financial Framework. We would like to use it to introduce regulations foreseeing broad possibilities of combining two sources of funding as possible.

This applies both to financial instruments used to distribute funds for specific projects and to single investments. Let us look at it in more detail.

In the first case – financial instruments – greater flexibility would mean, for instance, combining either complementary guarantees and loans, or loans and grants from Juncker Plan and cohesion funds.

We see it as a chance to create instruments suitable for investors’ needs in the whole EU.

Europe must do more for investors

The other issue is the two sources of funding in one investment project, where entrepreneurs face an array of practical problems.

Imagine an investor willing to finance a project worth €1 million, who received 30 percent of the needed money from an EU grant. It's no problem so long as the rest of the investment is funded by own resources or bank loans.

However, if funds from Juncker plan come into play, the grant has to be decreased, as a loan from this source lowers the eligible costs – the basis for the grant. It does not help in creating a favourable and accessible investment environment.

There are two legislative proposals on the financial instruments on the table right now, yet they still raise many questions.

Moreover, they only concern instruments providing financing for projects but do not touch the issue of individual investments.

This is why we have prepared our own proposal, which will help remove the obstacles in individual projects. We are convinced that, together with other stakeholders, we can come up with satisfactory solutions.

It is worth underlining that despite the barriers mentioned above, we are now implementing a project funded by combined sources. A modern route, which will drive part of the car traffic out of the city centre, will be built in Krakow.

The road is being built with help from the Juncker fund, whereas the tram tracks are catered for by an EU grant.

This is an example of a successful combination of the funds. But we can certainly make the whole process less complicated and more investor-friendly.

The investors’ perspective lies in the interest of the whole EU.

Jerzy Kwiecinski is Polish secretary of state in the ministry of economic development. Witold Slowik is Polish undersecretary of state in the ministry of economic development.

Analysis

Doubts hang over EU investment plan's future

Questions of value for money and a lack of transparency complicate adding almost €200 billion more and extending the Juncker investment plan to 2020.

Eastern partners, eastern problems

The EU must hold out the olive branch of possible membership in the distant future - but the current domestic problems in the ex-Soviet states, let alone their links to Russia make more than that difficult.

EU must put Sudan under microscope at Africa summit

The EU is throwing a lot of money at Sudan to manage migration from the Horn of Africa to Europe - but the upcoming Africa Union-EU summit is a chance to probe Sudan about its own human rights record.

The EU's half-hearted Ostpolitik

If, as the EU claims, the Eastern Partnership summit is not a format for conflict resolution, where else will the security issues that hold the region back be resolved?

EU must confront Poland and Hungary

Curtailing NGOs and threatening judicial independence are the hallmarks of developing-world dictators and authoritarian strongmen, not a free and pluralistic European Union.

Mind the gap: inequality in our cities

Minimum wages, 'living' wages and a universal basic income are all part of the ongoing mix to find ways to reduce social inequality across the EU.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level
  2. European Friends of ArmeniaLaunch of Honorary Council on the Occasion of the Eastern Partnership Summit and CEPA
  3. International Partnership for Human RightsEU Leaders Should Press Azerbaijan President to End the Detention of Critics
  4. CECEKey Stakeholders to Jointly Tackle the Skills Issue in the Construction Sector
  5. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  6. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  7. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  8. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  9. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left
  10. EPSUWith EU Pillar of Social Rights in Place, Time Is Ticking for Commission to Deliver
  11. ILGA EuropeBan on LGBTI Events in Ankara Must Be Overturned
  12. Bio-Based IndustriesBio-Based Industries: European Growth is in Our Nature!

Latest News

  1. EU awaits UK proposals in final push for Brexit breakthrough
  2. Berlin risks being 'culprit' for stalling EU, warns Green MEP
  3. Eastern partners, eastern problems
  4. Germany's Schulz under pressure to enter coalition talks
  5. LuxLeaks trial re-opens debate on whistleblowers' protection
  6. Wilders says Russia is 'no enemy' ahead of Moscow visit
  7. EU must put Sudan under microscope at Africa summit
  8. Mali blames West for chaos in Libya

Stakeholders' Highlights

  1. Dialogue PlatformErdogan's Most Vulnerable Victims: Women and Children
  2. UNICEFEuropean Parliament Marks World Children's Day by Launching Dialogue With Children
  3. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  4. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure
  5. Nordic Council of MinistersNordic countries prioritise fossil fuel subsidy reform
  6. Mission of China to the EUNew era for China brings new opportunities to all
  7. ACCASmall and Medium Sized Practices Must 'Offer the Whole Package'
  8. UNICEFAhead of the African Union - EU Summit, Survey Highlights Impact of Conflict on Education
  9. Nordic Council of MinistersNordic Council Calls for Closer Co-Operation on Foreign Policy
  10. Swedish EnterprisesTrilogue Negotiations - Striking the Balance Between Transparency and Efficiency
  11. Access EuropeProspects for US-EU Relations Under the Trump Administration - 28 November 2017
  12. Nordic Council of MinistersSustainable Growth the Nordic Way: Climate Solutions for a Sustainable Future