Page 9 - ePaper
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Under the preventive arm of the Pact, neither the achievement of the medium-term
budgetary objective (MTO) nor the required fiscal adjustment towards it would be affected,
since both are set in structural terms. The structural balance is by definition not affected by
one-off expenditures, such as the contributions to the Fund.
Under the corrective arm of the Pact (the Excessive Deficit Procedure [EDP]), compliance
with the fiscal adjustment effort recommended by the Council would not be affected, since
this is also measured in structural terms. A contribution to the EFSI should therefore not
lead to a Member State being found non-compliant with its EDP recommendation.
In case of a breach of the 3% deficit threshold, when preparing the report envisaged under
Article 126(3) of the TFEU, the Commission will consider the contribution to the EFSI to be a
“relevant factor” in line with Article 2(3) of Regulation 1467/97. This means that an EDP will
not be launched provided the breach is due to the contribution to the EFSI, and provided it
is small and is expected to be temporary.
In case of a breach of the debt criterion, when preparing the report envisaged under Article
126(3) of the TFEU, the Commission will consider the contribution to the EFSI to be a
“relevant factor” in line with Article 2(3) of Regulation 1467/97. This means that the
Commission will not launch an EDP provided that the breach is due to the contribution to
the EFSI.
12. Why would governments invest in the Fund if there's no guarantee that
their projects would be financed?
The €315 billion EU Investment Plan was designed to stand alone. However, the EFSI has
been constructed to allow Member States to contribute directly with cash or guarantees.
The EIB is an institution with a long history without country-specific or sectorial quotas, and
yet Member States participate in its capital.
Supporting quality investments and restoring confidence in Europe's economy is a key
priority as stated in the December Council conclusions. The reduction of investment
shortfalls, the promotion of jobs and growth and a sustainable recovery would benefit all EU
Member States. The EFSI should finance projects across the Union, including in the
countries most affected by the financial crisis.
Moreover, the EFSI is an instrument that will provide additional risk-financing (the kind of
financial instruments that are often missing in the current economic environment). This
could be of great benefit for innovative smaller companies and cross-border infrastructure
projects.
Member States participating in the EFSI's capital will also get proportional seats and votes in
the EFSI's Steering Board, determined by the size of their contribution. This would allow
them to have a say in defining the investment guidelines and risk profile of the Fund, but
not to intervene in individual investment decisions.
Finally, Member States will also be able to participate alongside the EFSI via co-investment
platforms, which would allow them to channel their investments into specific areas or
sectors, as well as to collaborate on the funding of transnational and regional projects.
9
budgetary objective (MTO) nor the required fiscal adjustment towards it would be affected,
since both are set in structural terms. The structural balance is by definition not affected by
one-off expenditures, such as the contributions to the Fund.
Under the corrective arm of the Pact (the Excessive Deficit Procedure [EDP]), compliance
with the fiscal adjustment effort recommended by the Council would not be affected, since
this is also measured in structural terms. A contribution to the EFSI should therefore not
lead to a Member State being found non-compliant with its EDP recommendation.
In case of a breach of the 3% deficit threshold, when preparing the report envisaged under
Article 126(3) of the TFEU, the Commission will consider the contribution to the EFSI to be a
“relevant factor” in line with Article 2(3) of Regulation 1467/97. This means that an EDP will
not be launched provided the breach is due to the contribution to the EFSI, and provided it
is small and is expected to be temporary.
In case of a breach of the debt criterion, when preparing the report envisaged under Article
126(3) of the TFEU, the Commission will consider the contribution to the EFSI to be a
“relevant factor” in line with Article 2(3) of Regulation 1467/97. This means that the
Commission will not launch an EDP provided that the breach is due to the contribution to
the EFSI.
12. Why would governments invest in the Fund if there's no guarantee that
their projects would be financed?
The €315 billion EU Investment Plan was designed to stand alone. However, the EFSI has
been constructed to allow Member States to contribute directly with cash or guarantees.
The EIB is an institution with a long history without country-specific or sectorial quotas, and
yet Member States participate in its capital.
Supporting quality investments and restoring confidence in Europe's economy is a key
priority as stated in the December Council conclusions. The reduction of investment
shortfalls, the promotion of jobs and growth and a sustainable recovery would benefit all EU
Member States. The EFSI should finance projects across the Union, including in the
countries most affected by the financial crisis.
Moreover, the EFSI is an instrument that will provide additional risk-financing (the kind of
financial instruments that are often missing in the current economic environment). This
could be of great benefit for innovative smaller companies and cross-border infrastructure
projects.
Member States participating in the EFSI's capital will also get proportional seats and votes in
the EFSI's Steering Board, determined by the size of their contribution. This would allow
them to have a say in defining the investment guidelines and risk profile of the Fund, but
not to intervene in individual investment decisions.
Finally, Member States will also be able to participate alongside the EFSI via co-investment
platforms, which would allow them to channel their investments into specific areas or
sectors, as well as to collaborate on the funding of transnational and regional projects.
9
