Sunday

29th Mar 2020

Juncker puts pressure on MEPs over investment plan

European Commission president Jean-Claude Juncker's investment plan is facing a battle in the European Parliament, while being flagged as a potential risk for EU taxpayers' money.

The €315 billion “Juncker fund”, also known the European Fund for Strategic Investments (EFSI), is being contested by MEPs who don’t want that part of the €16 billion EU contribution to the fund is taken from the EU's infrastructure and research programmes.

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  • Juncker reportedly threatened to withdraw the plan if MEPs play hardball (Photo: ec.europa.eu)

The opposition is such that Juncker is reportedly playing political poker on the issue.

According to Spanish daily El País, Juncker threatened at a meeting last week with socialist MEPs to withdraw the flagship growth plan altogether if parliament does not validate his proposal.

Although MEPs have not confirmed the report, some do recognise tensions between Juncker and parliament.

"I found the comment by the president of the commission more moderate than it was perceived in the reports. He was worried about new approaches of financing proposed by the European Parliament," said German centre-left deputy Udo Bullmann, who is dealing with the fund legislation for the S&D group.

"The discussion was frank and honest," said another centre-left MEP, using polite code for a testy exchange.

"Juncker is putting a lot of pressure on the parliament," the MEP added.

The commission refused to comment on the incident, but a spokesperson said that "Jean-Claude Juncker made his view very clear that the guarantee fund is crucial. Without it we won’t be able to reassure investors."

The fund is meant to attract private investors to put money into projects across Europe and to act as a shot-in-the-arm for the EU economy.

"Juncker wants his plan to be adopted quickly and he did not expect such resistance from the parliament," said liberal MEP Dominique Riquet, who heads up an investment “intergroup” in EU assembly.

"The pressure come directly from the president or vice-president of the commission or from member states sharing the same positions”, he added.

There is a large consensus in the four parliamentary committees discussing the fund (budget; economic affairs; transport; and industry) that alternatives have to be found to protect EU money meant for infrastructure and research.

In the amendments to the Juncker plan to be handed in on Thursday (19 March), MEPs suggest that money come instead from non-allocated budget funds or from fines collected by the commission.

The amendments will now be discussed between the parliament, the commission, and the council of ministers before a committee vote on 20 April.

"Unlike usual budget discussions, it is the parliament against the commission and the member states, not parliament and commission against member states," notes Riquet.

"It will be difficult for the parliament, but everyone wants a compromise," he added.

"My gut feeling tells me that the commission stands ready for compromise building in the forthcoming weeks," said Bullmann.

Auditors cast doubt

Meanwhile, an opinion published Tuesday (17 March) by the EU Court of Auditors cast doubt on the safety of the fund’s guarantees for taxpayers.

The guardian of EU finances said the European Commission did not provide enough information on how to secure the €16 billion the EU will put into the fund.

The commission did not "explicitly exclude contingent liabilities for the EU budget beyond the committed funds," wrote the auditors, pointing to the risk that the plan could cost more to the EU budget if projects prove to be too risky for private investors.

The court also asked to be more involved in the plan, saying it should carry out the external audit of the fund.

The commission reacted cautiously to the court’s non-binding report.

"We will examine it in the coming days. We are mindful of the tripartite agreement between the commission, the European investment bank and the court of auditors," said a spokesperson, referring to a 2003 agreement by which the court can carry out audits on the European Investment Bank, which is to finance investmenrs under the EU guarantee.

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