In 2008, the Juncker Plan was created to help the European economy recover from the global financial crisis. It ended up mobilising more than half a billion euros in investments. Now, Brussels is aiming for a similar result with InvestEU
The InvestEU funding programme has been given a guarantee of €19.65 billion by the European Commission, the European Investment Bank (EIB) and the European Investment Fund (EIF), to support investment projects across Europe.
The programme is a key pillar of the European Union’s stimulus package to recover from the COVID-19 pandemic and help build “a greener, more digital, and more resilient European economy”. InvestEU aims to mobilise at least €372 billion in public and private financing.
“This agreement comes just at the right time as we emerge from the pandemic and face mounting geopolitical uncertainty,” said EU trade commissioner Valdis Dombrovskis.
The money will be spent on projects that support the transition to sustainable infrastructure; research, innovation and going digital; small and medium-sized businesses, especially those affected by the Covid-19 pandemic; and social investment and skills.
“InvestEU will spur vital large-scale private sector investment to help build and support the businesses and jobs of the future,” Dombrovskis said. “This will better equip us as we face the unavoidable economic and social consequences of the war in Ukraine. Today’s milestone agreement will help us reach our medium-term economic and wider policy objectives.”
Building on the ‘Juncker Plan’
The first InvestEU projects may receive funding as early as next month, with at least 30% of all the investments going to areas that directly contribute to Europe’s transition to a green economy.
“The investment needs we must address in the coming years are truly immense,” said EU Commissioner for the Economy, Paolo Gentiloni. “And I’m very confident that InvestEU will prove to be an invaluable tool to help us face that challenge. Today we open a new chapter in the story of the European Commission’s successful partnership with the EIB Group: to build sustainable infrastructure, drive innovation, develop future-oriented skills and nurture the growth of SMEs.”
InvestEU is based on the successful Investment Plan for Europe and its European Fund for Strategic Investments (EFSI0. Better known as the ‘Juncker Plan’, the scheme was started by former European Commission president Jean-Claude Juncker to help Europe recover from the 2008 global financial crisis.
It ran between 2015 and 2020 and mobilised close to €550 billion in additional investments across the Continent. More than one million SMEs received financing, which generated 1.7 million jobs and boosted EU gross domestic product by 1.8%, according to calculations by the EU.
Brussels is hoping for a similar outcome this time around.
“Over the next six years, InvestEU will unlock much needed financing in support of businesses, innovation, infrastructure and the environment across Europe,” said EIB vice president Teresa Czerwińska.
“By combining public funds with our expertise and risk-bearing capacity we can successfully mobilise large-scale investments, both public and private, that will support Europe in its recovery from the Covid-19 crisis and in the transition to a green and sustainable economy. We are thrilled and proud to join the European Commission and other partners in our role as the lead implementing and advisory arm of the InvestEU programme,” she said.