One year after taking office, the new European Commission, chaired by Jean-Claude Juncker, has launched some of the most significant initiatives of its political program. Notable among the priorities established by the Juncker Commission are, firstly, Employment, Growth and Investment, which has been consolidated with the implementation of an ambitious Investment Plan known as the Juncker Plan.
The Investment Plan focuses on the elimination of obstacles to investment, the visibility of investment projects, technical support for those projects and smarter use of both new and existing financial resources. To achieve these goals, the plan operates in three areas of activity:
- Mobilising investments of at least 315 billion euros in three years.
- Supporting investment in the real economy.
- Creating an investment-friendly environment.
- Mobilising investments
The first goal involves mobilising investments (at least 315 billion euros by 2017), which is essentially coordinated through the European Fund for Strategic Investments (EFSI), which aims to address investment gaps which the market cannot finance alone, mobilising private investment in strategic initiatives in key areas such as infrastructures, education, research and innovation, as well as risk financing for Small- and Medium-Sized Enterprises (SMEs).
The EFSI has been operational since September and allows anybody (not only member States) to present projects directly to the European Investment Bank (EIB) to finance infrastructures and innovation, and also to the European Investment Fund (EIF) for projects involving financing for SMEs.
The projects for which financing is requested should have a high economic and social value in relation to the fulfilment of the political objectives of the EU, attract private capital in addressing market failures, be technically and economically viable and respect EU regulations on State aid.
Some examples of the Fund’s areas of priority action are:
- Infrastructures (transport, energy, communication networks, environment and urban planning).
- Education and training, health, R&D and innovation.
- Renewable energies and energy efficiency.
- Support for SMEs.
So far eight pre-funded projects have been established since the month of July 2015, three of which have Spanish participation: Abengoa (chemical process and biotechnology research project financed with 170 million out of a total of 340 million euros), Grifols (100 million for research into new health treatments) and the Spanish gas network (to receive 125 million euros through Redexis).
In October 2015 it was announced that as part of this Investment Plan access would be opened up to micro-enterprises, mobilising 237 million euros in loans to support 20,000 European micro-enterprises.
For the operation of the Fund the participation of private investors is essential. The private sector can participate by co-financing the project or by sharing the risks. Investors can also take part in the Investment Platform that will soon be established with the participation of certain collaborating banks.
- Supporting investment in the real economy
The second area of the Commission’s Investment Plan is complementary to the first in that it proposes to support investment in the real economy.
Within this area support will be provided on the one hand through the European Investment Advisory Hub (EIAH), a joint initiative by the European Commission and the European Investment Bank, which aims to be a gateway for investment support that will make it possible to share best practices, acquired knowledge and real case studies in the field of project financing and management.
Another initiative to support investment is the European Investment Project Portal (EIPP), which will be launched at the end of 2015. The Portal is a transparent platform of viable projects that ensures that investors have access to reliable information on which to base their decisions. The aim is to give investors the confidence they need to pursue their projects and avoid possible obstacles or uncertainties.
- Creating an investment-friendly environment
The third and final area of the Investment Plan focuses on creating an investment-friendly environment, with a proposal to improve the investment environment and financing conditions by progressing towards a Digital Single Market, an Energy Union and a Capital Markets Union.
Without doubt, the implementation of this Investment Plan during the mandate of the Juncker Commission until 2019 will provide huge business opportunities for both entrepreneurs and investors who can take advantage of the opportunity to receive the support offered by the European Union for private initiatives.