EU Court of Auditors says Juncker Plan may have been overstated

EPA-EFE/STEPHANIE LECOCQ

European Commission President Jean-Claude Juncker gives a press conference about the Juncker Plan in Brussels, July 18, 2018.

EU Court of Auditors says Juncker Plan may have been overstated


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A new report by the European Court of Auditors claims that the amount of investment mobilised by the Juncker Plan may have been overestimated.

The report, acknowledging the overall effectiveness of the investment financing tool since its launch in 2015 and said the Juncker Plan has replaced pre-existing financing or alternative funding sources mainly in the fields of energy and transport. The findings were in line with the court’s initial concerns about the plan’s financing, which were first raised in 2016.

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The projects financed by the European Fund for Strategic Investment (EFSI) could have else seemed financing by other public or private schemes, including Europe’s investment bank, itself. EFSI financing was referred not as the only standing option, but either because it was less expensive, or because of its better payback terms, offering longer periods.

In some cases, according to the Court, both the Commission’s and the European Investment Bank’s numbers did not take into account the fact that a handful of projects had been financed by the investment fund.

The ECA also found that by mid-July 2018, the bank had approved €65.5 billion of financing for EFSI-related projects, which already exceeded its initial estimates of €61 billion. This led to an increase in the number of its higher-risk financing operations in comparison to 2014.

Responding to the findings, the European Commission’s spokeswoman, Annika Breidthardt, said the EU executive is “Not convinced that the court showed the full picture,” adding that most of the court’s concerns have already been addressed by the European Fund for Strategic Investment 2.0, which came into force on December 2017, and by the new inclusive proposal of InvestEU.

“We are, in fact, a little bit surprised that this emblematic programme, which has been recognised as a success by the European Parliament, has been subject to such negative coverage,” said Breidthardt, who said that the geographic distribution of investment depends also on the size of the receiving economies, which would warrant higher funding to larger nations.

Under its new name and structure, the Juncker Plan has been extended until the end of 2020 with a new target of mobilising at least €500 billion in investments.

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