By Luke Ming Flanagan
Today was a big day on the ECON Committee here (Economic & Monetary Policy), getting down to the nitty-gritty of the famous Juncker Plan – ye know the one, where Jean Claude has the EU put up €20bn of notional money that he is certain is going to attract in 15 times that amount to invest in projects that the private sector itself isn’t all that interested in.
To put it in their own words, ‘The European Fund for Strategic Investments (EFSI) will mobilise additional investments in the real economy in areas including infrastructure, education, research, innovation, renewable energy and energy efficiency.’
I’m not on that Committee so haven’t had the opportunity yet to put a question to those at the top table but judging on the kind of answers the most pointed of those questioners got today, I’m not really missing anything.
There were questions like:
1) How can we be sure that the countries most in need will be the ones to get most projects?
2) How can we be sure that the bigger countries – the ones putting Mr Juncker hopes will be putting more money to the fund than the smaller Member States and thus will have greater representation on the decision-making committees – won’t end up with most projects?
3) How can we be sure that the EU isn’t financing risky projects that would have gone ahead anyway?
4) The Juncker plan speaks of the EU (through the new fund, the EFSI), reducing the risk for private investors by assuming ‘the first loss’ – what exactly IS that, define please the ‘first loss’ principle and how it will work in practice?
5) How can we be sure this won’t become simply an exercise in public loss/private gain?
6) The EU/EIB (European Investment Bank, the people onto whose lap this plan fell) ran a similar project to this in the last Parliament, the aims of which (‘ to stimulate investment in key strategic EU infrastructure in transport, energy and broadband; to establish debt capital markets as an additional source of financing for infrastructure projects.’) were eerily similar to the aims of the Juncker Plan as outlined above. This was a Pilot scheme, a report on which was to be issued in 2013 – was that report issued, had the EIB tried to learn from that (as you surely expect they would) before launching into this far more expensive scheme?
There were many other really relevant questions, too many for this post, but they had one thing in common – not one of those asking the questions can have gone away satisfied with the answer.
There wasn’t a single cast-iron assurance given, simply because none CAN be given. The two individuals defending the Plan, Jyrki Katainen (Commissioner for Jobs, Growth, Investment & Competitiveness) and Werner Hoyer (President of the EIB) were long on wishes and preferences, short on concrete answers.
Look, I’d love to see Ireland’s economy up and moving again, people back to work in decent non-exploitative sustainable jobs. But on my impression of this Plan? In its own blurb it says that ‘Projects will be selected based on their viability, reliability and credibility.’ Based on those criteria, I don’t think I’d be putting my money on this particular project.
Consider this (because I have): The budget they eventually expect to have is €315bn (that’s €315,000,000,000!), from which they expect to create 1.3m jobs – that’s about €241,000 PER JOB! Does that make sense to you? Does that sound like value for money to you? Makes you wonder, it really does.