In Juncker’s New Deal ” “more trust than money

Breaking the “vicious cycle” that goes from “lack of confidence to lack of investments”. It is the task entrusted to the extraordinary investment plan through which the European Commission intends to restore the economy of EU28, “sick” with pessimism after six years of crisis and widespread unemployment. “With more investments Europe will able to increase its prosperity and create more jobs”, said Jean-Claude Juncker, president of the Commission, illustrating the plan on November 26 at a European Parliament session in Strasbourg. “Europe is turning a new page”, Juncker said, probably with an excessively solemn and optimistic tone. “The 315 billion euro plan that we are presenting, in close cooperation with the European Investments Bank, represents a new, ambitious way to spur investments without creating new debts. It’s time to invest in the future, in strategic sectors for Europe, such as energy, transport, broadband, education, research and innovation”. But Juncker is also an experienced politician. He is a liberalist who believes in the market although he is aware of its limits and dangers. So while he proclaims that Europe “needs new impetus” and that “we will provide the tools”, he is also willing to admit: “This plan should not be underestimated, nor should it be overestimated”. In order to function, “it should be accompanied by budgetary consolidation and structural reforms at public level”, which lag behind in many EU member countries. It should be specified that 315 billion is the result of the EIB’s 5 billion allocation for a three-year investment plan, while 16 will be appropriated via the EU budget. In this regard, Jyrki Katainen, vice-President of the Executive, powerful Commissioner for Employment and Growth, explained: “The European Fund for Strategic investments will serve as a multiplier. Every public Euro mobilised in the Fund can generate about €15 of investment, investments that otherwise would not have been undertaken”. In short: the plan counts on a multiplier effect, hoping that States will responsibly do their share and relying on the fact that the billions used for these purposes will not be counted in the calculations of the Maastricht criteria (deficit / GDP and debt / GDP). At the same time, it is assumed that the cash kept in the vaults of the banks and of several companies will flow in the production circuits, thereby reaching the “real economy”. Juncker also said what many governments were expecting to hear: “State contributions to this plan will be outside deficit and debt”. The Commission president pointed out: “The Plan should not be subject to politicisation”, nor should it be bound or subjected to “political games”. The Luxembourg leader knows that political tables can make the difference: for the good and for the bad… Finnish Commissioner Katainen, rigorist, finally converted to the need of stimulating growth, added: “the plan is not a magic wand and it won’t solve all the problems” of European economy. “But if it works it will make the difference. We must ensure that investments involve “enterprises, production sectors, infrastructures, mobilizing markets and employment. The Commission even went so far as to speak of “1.3 million new jobs”. The President of the European Investment Bank Werner Hoyer said: “In Europe we have great liquidity but not enough investments. We are facing a crisis in confidence”. He underlined that it will be necessary to act on several paths: starting from the removal of all barriers – legislative, bureaucratic – that may obstruct the investments process. It will equally be necessary to make full, effective use of the Structural Funds already set aside in the EU Financial Framework for the next seven years; to go-ahead with wise reforms in the labour market, in the financial sector, in the fields of research and education, infrastructure and energy. With the same emphasis it necessary to address the want of capital involving small and medium enterprises and boost the innovation capacities of areas most exposed to international competition. Finally, funds will be allocated to the most reliable projects, namely those with the potential of triggering “European added value”, along with high social-economic benefits, to be implemented within a three-year period. The “Juncker Plan” is there. Now it’s the turn of Parliament and Council to give a political green light to the Plan, that will be followed by the implementation phase. But those awaiting positive outcomes must be aware that it will require a lot of patience.