Juncker investment plan: A new acronym!
The President of the Commission yesterday announced the creation of the European Fund for Strategic
Investment (EFSI). Endowed with a EUR 21 billion government guarantee, it should make it possible to
finance EUR 315 billion in investments over three years (2015-2017) with the help of the EIB and private
investors. While we expect the EFSI to be more successful than the 2012 Compact for Growth, the EUR 315
billion target (a leverage of 15!) remains far too optimistic. It seems more reasonable to count on EUR 130 to
190 billion over three years when taking into account the contribution that the Member States will make to the
guarantee pool. The impact on growth in the euro zone would obviously be positive (from 0.3 to 0.5% per year
over three years, excluding the high multiplier effect on growth of infrastructure investment), but slow to kick
in (from H2 2016). The details of the plan will be finalised during the European summit on 18-19 December,
then the Commission will propose European regulations to the Ecofin and the Parliament for adoption before
June 2015. It is then expected that the EFSI will be launched during the second half of 2015.
