by N. Peter Kramer
Jean-Claude Juncker played his game. During
his campaign for the Presidency of the European Commission, one of his promises
was that he would start a European investment programme of 300 billion Euro for
the next three years.
The money should be allocated to infrastructure,
renewable energy and the triplet education/ research/ development; a brilliant
idea that could change the prevailing perception of a European Commission never
anticipating but always following economic problems.
‘Economies without investment can’t grow. And
non-growing economies can’t create new jobs’, said Juncker in his speech in the
European Parliament on July 15, the day he received green light by the EP for
his Presidency. When questioned where he was going to find
the money, his answers were very vague.
But, in the last week of November
President Juncker presented his €315 billion programme, called the European
Fund for Strategic Investments, for increasing small-business lending and
investments in roads, renewable energy, schools and other public services.
To
realise the total amount, the EU and the European Investment Bank will put up
€21 billion of guarantees to encourage the private sector to participate in the
programme. Most of the money has to come from private investors, insurance
companies and pension funds.
There is no doubt that Europe needs to do more to
pump up investment; and the new investment plan is better than the status quo.
However, the plan seems to sit short of the 300 bn. euros at just slightly more
than €100 billion a year. Europe needs more. Some comments call the new investment
programme inadequate and overly complicated.
The plan has still to be approved
by the European Parliament; the Socialist and the Liberal group (second and
fourth biggest political groups in the EP) have already asked for more, up to
double the amount.
The European
Council, (leaders of the member states) also has to approve it. This will be
the first real job for the new President of the Council, the Pole Donald Tusk, successor of Herman van Rompuy since December 1.
The
European leaders are adamant that they will not increase debt because the
national budgets are already stretched and must be balanced under the terms of
the EU treaties.
This insistence on not increasing debt even as the economy
weakens, especially in the 18 countries of the Eurozone, looks self-defeating.
The effect of austerity is causing a growing number of unemployed, especially
young people, and demolition of social security systems in countries as Greece,
Spain, France and Italy.
An anti-EU climate is flourishing in many of the EU
member states. Maybe it’s too early to conclude that
President Juncker and his Commissioners are trying to find other and better ways
out of the crisis.
But their decision to offer countries with budget problems, (France-Italy-Belgium),
more time to find a creative solution, could be a signal.
An important factor also
is that Germany’s economy, the engine of the EU, is stuttering. As one analyst
wrote in a note to his clients, ‘these days Germany is more of a one-eyed king
in the land of the blind than an economic superman’.
The December-summit of the EU leaders will
be significant. Juncker called his new college the Commission of the last
chance (for the EU) and maybe he is right. But the real responsibility for the
EU lies in the hands of the 28 leaders.
