Controversial new European Commission president Jean-Claude Juncker has laid out a plan to kick-start Europe’s flagging economy – but needs to win round other member states at crunch talks next month for it to happen.
Mr Juncker, whose bid for the presidency was opposed by David Cameron, told the European Parliament in Strasbourg, France, that his initiative offered “hope” to millions of citizens.
He said: “Europe is back in business. We are offering hope to millions of Europeans disillusioned after years of stagnation.”
The plan, which will require guarantees from the EU budget and European Central Bank, will now be discussed by the 28 EU leaders in December.
Mr Juncker said his “grand bargain to put Europe back to work” should “unlock” the equivalent of £250 billion over the next three years.
Under the plan, a new European fund for strategic investments will be set up, built on a guarantee of €16bn (£12.6bn) from the EU budget, combined with €5bn from the European Investment Bank.
He wants it to be used to help everything from kitting out new schools, to setting up charge points for electric cars on motorways and other private sector initiatives to kick-start jobs, spending and rebuilding.
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Downing Street reacted cautiously to the proposals, emphasising that there would be no overall increase in the EU budget as a result.
Mr Cameron’s official spokesman said: “The EU budget for the period has been set and it was a reduction.
“That’s what’s been agreed by all 28 members and that’s what will be stuck to.”
Critics complained that there was little new public money and that the scheme relied heavily on generating new investment from the private sector.
Commission officials said “prudent estimates from historical experience” suggested there would be a multiplier effect, with every euro in additional public funding generating 15 euros of new investment.
“Europe needs a kick-start and today the commission is supplying the jump cables,” Mr Juncker said. “We do not have a money-printing machine. We will have to attract money and make it work for us.”
Officials said the focus of the fund would be to invest in infrastructure – notably broadband and energy networks as well as transport, education and research and innovation. Europe’s economy has been struggling to grow since it emerged from recession over a year ago, partly because many governments are still cutting back on spending to reduce debt.
Investment levels in the EU are down some €430bn compared with 2007, before the financial crisis began. And while investment is back on the rise in the US, Europe is lagging behind.
EU vice-president Jyrki Katainen said “we need just enough money to get the motor running” and insisted the plan would not rely on creating more public debt, which already stands at some 90 per cent of EU gross domestic product.
He said the seed money from the EU budget would come from current, badly used funds, which would be redirected.
German Chancellor Angela Merkel said her government supported the plan “in principle” but said it still had to be discussed by member states.
But Gerolf Annemans, of the Belgian Vlaams Belang Party, dismissed the proposals, saying: “It’s a farce, it’s recycling and re-labelling. It is useless, and it’s hocus-pocus and abracadabra.”
Member states will meet to discuss the plans as part of scheduled summit talks on 18 and 19 December.
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