The new European investment plan

A critical analysis of financial instruments and infrastructure financing

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In November 2014 the European Commission announced a new Investment Plan that is to “unlock” €300 billion of investments in the “real economy between 2015 and 2017. The plan was promoted as a paradigm shift and crucial to lead Europe out of the current crisis. However some serious concerns exist regarding this effectiveness of the so called Juncker Plan.

This report focuses on a few elements that may undermine the promises of unlocking huge investment in the real economy. It explores the following questions:

 

  • Is the plan providing provide enough fresh money?
  • Will it be used to further the development of unsustainable infrastructural projects (such as infrastructure for gas or other fossil fuels)?
  • Is the project selection going to be transparent and subject to public scrutiny?
  • What about the danger of socialising high risks of private investments while privatising profits?
  • Do the financial mechanisms that are to be deployed, such as Project Bonds, imply a risk of imposing financial markets as a mediator between public investment and the real economy?

Read the full report here

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