SHAFAQNA – European Union governments should not contribute directly to the bloc’s 315 billion euro (233.89 billion pounds) investment fund, Germany‘s finance minister said on Tuesday, challenging Brussels’ call to expand it as a way to relaunch growth.
The European Union has drawn up a wish list of almost 2,000 projects worth 1.3 trillion euros for possible inclusion in the investment plan, relying on private investors to fund infrastructure plans across the continent.
The European Commission also wants EU countries to pay into the fund to maximise its impact on stagnant economies, but Berlin is concerned about governments adding to their already high debt loads.
“We are not in favour of national government contributions to the fund,” Schaeuble told his fellow finance ministers at a meeting in Brussels, in remarks broadcast to reporters.
His comments came just two weeks after the Commission agreed that any money that governments invest the European Fund for Strategic Investments (EFSI) will not put at risk countries’ efforts to comply with strict EU budget rules.
That was meant to encourage countries to come forward. Many have been concerned that if they invest in the EFSI, their deficits would grow and that would get them into trouble with the Commission because under EU rules countries have to run balanced budgets.
However, Schaeuble said he backed the plan overall and that Germany would indirectly contribute through state-owned development bank KfW. Schaeuble told a news conference that he and Economy Minister Sigmar Gabriel were thinking of making available an additional credit of 8 billion euros.
That would allow Berlin to back individual projects at home, rather than giving money to the fund that could go to projects in other EU countries it would not choose.
The Commission aims to have the first projects ready to attract private money in June. Many on the list have been frustrated by lack of financing or political problems affecting cross-broader projects.
Projects could include refuelling stations for hydrogen fuel cell vehicles in Germany, housing regeneration in the Netherlands, a new port in Ireland and a 4.5 billion euro fast rail connection between Estonia, Latvia, Lithuania and Poland.
The plan rests on using 21 billion euros of capital from the European Investment Bank and the EU budget to provide guarantees for private investors who choose to back projects that are chosen by a team of EU experts.
Source : Reuters.com