The European Parliament has approved the European Fund for Strategic Investments (EFSI) after MEPs made a number of amendments to the proposal.
Although the Budgets and Economic Monetary Affairs committees approved the EFSI, a cornerstone of the €315bn ‘Juncker Plan’, MEPs thwarted European Commission plans to cut back on other budgets to fund the vehicle.
The Commission had hoped to reduce research and transport investment budgets to fund the EFSI’s guarantee fund, a buffer fund to help reduce the risk of losses to external investors.
However, MEPs added legislation that called for budgets to be protected, as well as for the guarantee fund to be alternatively financed and gradually filled until it reaches €8bn size by 2022.
Budgets Committee chair Jean Arthuis, a French MEP from the Alliance of Liberals and Democrats in Europe (ALDE) party, said the Commission and Council’s proposal to finance the ‘Juncker Plan’ by cutting other “genuinely European”, trans-national projects was regrettable.
“At a time when all member states recognise the need to relaunch investment in Europe, I invite them to directly provision the guarantee, as a token of trust and confidence,” he said.
“Today, the Parliament was ambitious and creative. We hope the Council will follow suit, for the collective interest of Europe.”
One amendment proposes that the ESFI’s guarantees to third-party investors should be “irrevocable and unconditional”, in order to reassure contributors.
Other amendments included ensuring projects financed by the ESFI had a higher risk profile than those available to the European Investment Bank (EIB), thereby making them ineligible for direct EU budget or EIB finance.
Further amendments included changes to the investment committee structure and voting rights, as well as ensuring the Parliament retains oversight of the fund.
It will see a €16bn contribution from the EU budget and €5bn from the EIB, with the ESFI issuing bonds to external investors, leveraging the fund to €315bn.
Parliament passed the resolution and the mandate to negotiate with the Commission, which will begin on Thursday.
The co-rapporteurs were José Manuel Fernandes, a Portuguese MEP from the European People’s Party, and Udo Bullmann, a German MEP for the Social Democrats.
The amended agreement will now be voted on in June.
European Commission vice-president Jyrki Katainen welcomed the parliamentary vote and said the plan could now enter its final stages.
The former Finnish prime minister said arrangements were already being made to ensure EFSI funds were flowing into projects by September.
“The Commission will assist the co-legislators during the trilogue negotiations to agree on a compromise text that ensures the EFSI is based on sound, stable and predictable foundations,” he said.