Europe's back is to the future: Bankwatch and Counter Balance statement on the first projects of the European Fund for Strategic Investment (EFSI)

April 23, 2015

Yesterday the European Investment Bank announced [1] the first four projects to be financed from the EUR 315 billion EFSI. These include EUR 303 million for health care research in Spain, a public-private partnership in the Irish health sector, the expansion of the Dubrovnik airport in Croatia and a nineteenth century Italian steel factory.

Markus Trilling of Bankwatch said,
“Can someone explain how reviving an industrial revolution-era factory that was to be closed in the 1950s is somehow ‘innovative’? Similarly, the Dubrovnik airport project, a relic of a more recent past, will recycle unused funds from the 2007-2013 EU budget. The current budget couldn’t even fund the project if it wanted, as it only pays for projects that contribute to ‘smart, sustainable and inclusive growth.’ This is a very underwhelming start for the fund that is to kick start Europe’s future.’"

Xavier Sol of Counter Balance said,
“The announcement is a bit of a head scratcher. The bank said that it will take projects on its balance sheet even if the EU guarantee does not eventually apply. Where then is the additionality? This was the whole point of the Juncker Plan plan to begin with, to finance only risky projects that add genuine value to Europe. If EFSI projects would anyway be financed by the EIB, then it means that the fund may further deprive the EU budget of scarce public money so that the EIB can continue business as usual.”