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09 June 2015

Investing in European projects: Council confirms agreement with EP on new fund

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The EFSI is intended to stimulate participation by private investors in a broad range of new investment projects. The fund will be built on €16 billion in guarantees from the EU budget and €5 billion from the European Investment Bank.

The Permanent Representatives Committee (Coreper) on 9 June 2015 approved, on behalf of the Council, a compromise agreement on a European fund for strategic investments (EFSI) aimed at stimulating the economy.

The compromise reached with the European Parliament on 28 May 2015 paves the way for new investments to begin in mid-2015.

"In the current economic context, there is a clear need to boost investment," said Jānis Reirs, minister for finance of Latvia and president of the Council. "With an enhanced risk-bearing capacity, this new fund will create the conditions needed for the private sector to become involved."

The EFSI is intended to stimulate participation by private investors in a broad range of new investment projects. By taking on part of the risk through a first-loss liability, it is expected to achieve an overall multiplier effect of 1:15 in real investment. Such leverage will eventually allow more than €300bn of additional investment to be mobilised during a three-year investment period.

The fund will be built on €16 billion in guarantees from the EU budget and €5 billion from the European Investment Bank. To facilitate the payment of potential guarantee calls, a guarantee fund will be established so as to gradually reach €8 billion (i.e. 50% of total EU guarantee obligations).

Full press release

© European Council

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