In November 2014 the European Commission (EC) announced a new investment plan that is to unlock investment in the real economy of over €300 billion from 2015 to 2017. A new report by Counter Balance 'What’s new in the Investment Plan for Europe: business as usual or genuine innovation?' launched today provides a first assessment of the Investment Plan for Europe after one year of operations. It concludes that the establishment of the European Fund for Strategic Investments (EFSI) is problematic as it largely enables the European Investment Bank (EIB) to further conduct business as usual.
The report looks into specific elements of the Investment Plan for Europe which have barely been touched upon from a civil society perspective: the governance of the EFSI, its accountability and its risk of corporate capture.
First, it analyses the set-up of the EFSI and finds that its additionality is highly questionable while its current governance structure does not allow proper accountability of the decisions to grant the EU guarantee to specific projects.
Then, the report shows that the EFSI is acutely vulnerable to corporate capture. Indeed, big corporations with previous business relations with the EIB are taking the lion’s share of EFSI support. In parallel, the capacity of the EFSI Investment Committee to ensure the best use of public money as part of the investment plan appears dubious at the very least.
Finally, the report formulates policy recommendations to get the EFSI and the EIB back on track, starting from the mid-term review of EFSI to be conducted by the EU institutions.
Xavier Sol, Director or Counter Balance, says:
“Our analysis is that so far the Investment Plan for Europe largely looks like a window-dressing and public relations exercise. Its additionality is questionable and the set-up of EFSI makes it possible for the European Investment Bank to conduct business as usual.
It is concerning to hear from the European Commission that EFSI is likely to be extended after 2017 and could become a model for the next EU budget for the period 2020-2026. Before discussing the prolongation of the EFSI, a genuine qualitative analysis of its features needs to take place so that the plan focuses on the quality and added-value of EFSI operations.
In the mid-term, those willing to improve the functioning of EFSI should also consider setting in action deep reform of the EIB itself, if any new plan of this kind is to really benefit European citizens. In this context, the business model of the EIB needs to be publicly debated, including within the European Parliament.”