Page 9 - ePaper
P. 9
2) This guarantee, coupled with EIB-resources of € 5 billion, will absorb the higher risk in
strategic investments and in this way mobilise private resources that are currently
not being invested in the real economy.
In addition, and on top of the € 315 billion mobilised by the EFSI, European Structural and
Investment Funds need to be deployed in a more efficient way and boosted further.
Member States and private investors can participate directly in the Fund or at project-level.
14. What is the share of public versus private money and why?
This will depend on the specific project and the way it is constructed. The EFSI will work with
a wide range of instruments, including guarantees, equity, various debt instruments and
venture capital for SMEs, so as to crowd-in as much private investments as possible.
15. How is the Fund financed?
To establish the EFSI, a guarantee of € 16 billion, will be created under the EU budget
which will go to the Fund. The EIB will commit € 5 billion. The Fund will thus start with
significant firepower while being able to expand its activities further over time. Member
States, directly or through their National Promotional Banks, will have the opportunity to
contribute to the Fund in the form of capital. Importantly, in the context of the assessment
of public finances under the Stability and Growth Pact, the Commission will take a
favourable position towards such capital contributions to the Fund.
The EU guarantee will be backed up by existing EU funds from the existing margins of the
EU budget, the Connecting Europe Facility and the Horizon 2020 programme. Thanks to the
Fund, the impact of these EU programmes on the real economy will be multiplied, compared
to what they would have achieved otherwise.
16. How is the EU guarantee constituted?
The EU guarantee will be progressively constituted to reach € 16 billion. It will be backed up
by a provisioning buffer of € 8 billion, which is 50% of the total guarantee.
The provisioning buffer will consist of € 2 billion from the EU-budget and from
appropriations under two main EU financing programmes: the Connecting Europe Facility (€
3.3 billion) and Horizon 2020 (€ 2.7 billion). Importantly, the necessary re-affected
appropriations in these two programmes do not mean that the money is lost. On the
contrary, the EFSI offers significantly increased possibilities to invest in Europe's
infrastructure, as well as for research and innovation purposes. This is a win-win situation for
everyone involved.
17. What is a multiplier effect?
The multiplier effect is the ratio between the total financial volume of the projects
generated as a result of the intervention of the Fund and the initial public money mobilised
to set up the Fund. In the case of EFSI, this means that a small share of public money used as
a risk-bearing capacity will allow a much larger share of private finance to invest in projects
which would otherwise not have been funded.
8
strategic investments and in this way mobilise private resources that are currently
not being invested in the real economy.
In addition, and on top of the € 315 billion mobilised by the EFSI, European Structural and
Investment Funds need to be deployed in a more efficient way and boosted further.
Member States and private investors can participate directly in the Fund or at project-level.
14. What is the share of public versus private money and why?
This will depend on the specific project and the way it is constructed. The EFSI will work with
a wide range of instruments, including guarantees, equity, various debt instruments and
venture capital for SMEs, so as to crowd-in as much private investments as possible.
15. How is the Fund financed?
To establish the EFSI, a guarantee of € 16 billion, will be created under the EU budget
which will go to the Fund. The EIB will commit € 5 billion. The Fund will thus start with
significant firepower while being able to expand its activities further over time. Member
States, directly or through their National Promotional Banks, will have the opportunity to
contribute to the Fund in the form of capital. Importantly, in the context of the assessment
of public finances under the Stability and Growth Pact, the Commission will take a
favourable position towards such capital contributions to the Fund.
The EU guarantee will be backed up by existing EU funds from the existing margins of the
EU budget, the Connecting Europe Facility and the Horizon 2020 programme. Thanks to the
Fund, the impact of these EU programmes on the real economy will be multiplied, compared
to what they would have achieved otherwise.
16. How is the EU guarantee constituted?
The EU guarantee will be progressively constituted to reach € 16 billion. It will be backed up
by a provisioning buffer of € 8 billion, which is 50% of the total guarantee.
The provisioning buffer will consist of € 2 billion from the EU-budget and from
appropriations under two main EU financing programmes: the Connecting Europe Facility (€
3.3 billion) and Horizon 2020 (€ 2.7 billion). Importantly, the necessary re-affected
appropriations in these two programmes do not mean that the money is lost. On the
contrary, the EFSI offers significantly increased possibilities to invest in Europe's
infrastructure, as well as for research and innovation purposes. This is a win-win situation for
everyone involved.
17. What is a multiplier effect?
The multiplier effect is the ratio between the total financial volume of the projects
generated as a result of the intervention of the Fund and the initial public money mobilised
to set up the Fund. In the case of EFSI, this means that a small share of public money used as
a risk-bearing capacity will allow a much larger share of private finance to invest in projects
which would otherwise not have been funded.
8
