Council agrees EFSI negotiating stance

The Council of the European Union has agreed its negotiating stance on a proposed regulation for the European Fund for Strategic Investments (EFSI), allowing the Latvian Council Presidency to start negotiations with the European Parliament.

Talks with MEPs are expected to begin once the EU institution has finalised its own negotiating stance. The aim is for an overall agreement to be reached by June in order to enable new investments to begin even before the end of mid-2015.

The EFSI will be established within the European Investment Bank (EIB) by an agreement between themselves and the Commission. The fund will support projects in a broad range of areas, including transport, energy and broadband infrastructure, education, health, research and risk finance for SMEs. The EFSI will target socially and economically viable projects without any sectoral or regional pre-allocation, particularly addressing market failures, and will complement on-going EU programmes and traditional EIB activities.

The Council agreed that the fund would be built on €16bn in guarantees from the EU budget, as well as €5bn from the EIB. To facilitate the payment of potential guarantee calls, a fund would be established that would gradually reach €8bn (i.e. 50% of total EU guarantee obligations) by 2020. In line with the proposal from the European Commission, EU funding would mostly come by redeploying grants from the Horizon 2020, the Connecting Europe Facility and unused margins in the budget.

The proposed regulation would also set up a ‘European investment advisory hub’ to provide support for the identification, preparation and development of projects across the EU, including a ‘European investment project directory’ to improve investors’ knowledge of existing and future projects.