Page 14 - ePaper
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26. What about state aid?
In accordance with the Treaty, infrastructure and project investments supported under EFSI
need to be consistent with EU State aid rules. State aid rules ensure that projects address
real needs, keep costs under control and guarantee that public money is genuinely required
to get projects off the ground. Applying state aid control principles thus sends a reassuring
message to those involved in subsidised projects, competitors working on rival infrastructure
and taxpayers: it ensures the economic viability of projects, maximising effect on economic
growth and jobs.
To that end, the Commission announced in the Investment Plan for Europe that for the
purpose of State aid assessments, a project will have to meet a set of core principles,
inspired by competition policy, to be eligible for support under the EFSI – public support
should be limited to what is necessary to kick-start investment and should not result in
overcompensation; no duplication of existing infrastructure; and fair and reasonable access
to infrastructure should be available to all users.
If a project meets these criteria and receives support from the EFSI, the Commission has
announced that any national complementary support will be assessed under a simplified and
accelerated State aid assessment. This is possible because EFSI funding projects will already
respect the core principles of state aid rules.
Financing and functioning of the EFSI
27. How will the €8 billion earmarking within the EU budget provide €16
billion of guarantees to the EFSI?
The EU has a very high quality signature and its budget is solid and trust-worthy. Thus, the
EU does not need to provide pre-financing for such a guarantee to be credible for the
markets and useful for the EIB. The guarantee fund of €8 billion is established only to
facilitate the payment of potential guarantee calls, since it avoids having to arrange sudden
spending cuts or re-programming. Thus, it brings transparency and predictability to the
budgetary framework but is not as such necessary for the guarantee to work.
In other words, the guarantee fund will be put in place to mitigate any potential impact on
the EU budget. Its calibration (50% of the value of the guarantee) has been chosen so that
the EU can meet any potential risks with an adequate safety margin.
28. Is it sufficiently credible to work?
In terms of budgetary construction, a similar set-up is already being used for the EIB's
lending activities outside the Union. The EFSI is a partnership agreement between the
Commission and the EIB. The EIB is a financial institution with a track-record dating back to
1958 and ample experience in providing risk-bearing capacity and mobilising finance from
private investors.
The EFSI will have the major advantage of being able to finance projects in a number of
different sectors, ranging from energy and transport to innovation, meaning that it will have
a broad portfolio of very different projects. Moreover, the EFSI will have the flexibility to
work with a wide range of different financial instruments, chosen depending on the profile
14
In accordance with the Treaty, infrastructure and project investments supported under EFSI
need to be consistent with EU State aid rules. State aid rules ensure that projects address
real needs, keep costs under control and guarantee that public money is genuinely required
to get projects off the ground. Applying state aid control principles thus sends a reassuring
message to those involved in subsidised projects, competitors working on rival infrastructure
and taxpayers: it ensures the economic viability of projects, maximising effect on economic
growth and jobs.
To that end, the Commission announced in the Investment Plan for Europe that for the
purpose of State aid assessments, a project will have to meet a set of core principles,
inspired by competition policy, to be eligible for support under the EFSI – public support
should be limited to what is necessary to kick-start investment and should not result in
overcompensation; no duplication of existing infrastructure; and fair and reasonable access
to infrastructure should be available to all users.
If a project meets these criteria and receives support from the EFSI, the Commission has
announced that any national complementary support will be assessed under a simplified and
accelerated State aid assessment. This is possible because EFSI funding projects will already
respect the core principles of state aid rules.
Financing and functioning of the EFSI
27. How will the €8 billion earmarking within the EU budget provide €16
billion of guarantees to the EFSI?
The EU has a very high quality signature and its budget is solid and trust-worthy. Thus, the
EU does not need to provide pre-financing for such a guarantee to be credible for the
markets and useful for the EIB. The guarantee fund of €8 billion is established only to
facilitate the payment of potential guarantee calls, since it avoids having to arrange sudden
spending cuts or re-programming. Thus, it brings transparency and predictability to the
budgetary framework but is not as such necessary for the guarantee to work.
In other words, the guarantee fund will be put in place to mitigate any potential impact on
the EU budget. Its calibration (50% of the value of the guarantee) has been chosen so that
the EU can meet any potential risks with an adequate safety margin.
28. Is it sufficiently credible to work?
In terms of budgetary construction, a similar set-up is already being used for the EIB's
lending activities outside the Union. The EFSI is a partnership agreement between the
Commission and the EIB. The EIB is a financial institution with a track-record dating back to
1958 and ample experience in providing risk-bearing capacity and mobilising finance from
private investors.
The EFSI will have the major advantage of being able to finance projects in a number of
different sectors, ranging from energy and transport to innovation, meaning that it will have
a broad portfolio of very different projects. Moreover, the EFSI will have the flexibility to
work with a wide range of different financial instruments, chosen depending on the profile
14
