EESC Corner: InvestEU – An additional space opened for financial instruments in the 2021 – 2027 EU financial framework

The recent economic crisis significantly reduced the volume of investment activity in the EU and it has yet to recover. The aim of all the key elements of EU economic policy must be to find pathways to a sustained recovery in investment, including investment in the public interest.

One way of achieving this aim is to strike a balance within the EU budget between investments in repayable financial instruments and those that are based on the subsidy principle. Repayable financial instruments exploiting the potential of the EU budget, at central and national level, have made significant advances, particularly for the 2014-2020 financial framework, and yet are not used as much as they ideally could be.

Among the improvements needed are the systemic alignment of a large number of uncoordinated instruments at central level into a single management mechanism. InvestEU is an example of this. The InvestEU programme can be seen as a crucial contribution to the EU budget in line with recent changes to ensure European added value, greater flexibility, synergies between chapters and simplified procedures. This contribution should result, in the case of InvestEU, in increased investment activity over the long term (with a total of EUR 650 billion being mobilised by 2027), a strengthening of the role of the financial market, including in relation to projects of public interest, and a more effective allocation of EU budget resources, which are subject to a natural market test thanks to the return on investment element. InvestEU builds on the so far well-regarded practice of the European Fund for Strategic Investments (EFSI) and the Investment Plan for Europe and takes this much further forward.

The progressive principle on which the EFSI is based should be used in merging the spectrum of all centrally established financial instruments at the EU level. The fact that the package of regulations on the future multiannual financial framework includes a proposal to strengthen investment activity in the EU, including long-term investment projects that are of high public interest, while also respecting the sustainable development criteria (in line with the EU’s commitment to adhere to these as part of the 2030 Sustainable Development Agenda) is certainly welcomed.

We appreciate the European Commission’s efforts to create an umbrella financial instrument and also agree with the focus of its content. Its unified management, enhanced transparency and potential for synergies provide a greater opportunity to achieve the desired effects compared with the current situation. We stress the need to carry out a thorough market test of projects with a view to ensuring the adequacy of specific projects that are suitable for the application of financial instruments. We appreciate the fact that, in addition to promoting sustainable infrastructure, small and medium-sized enterprises (SMEs) and research and innovation, the InvestEU programme also focuses on social investment and skills. We also appreciate the expected positive impact of the InvestEU programme on the development of financial markets in the Member States; in this regard, it stresses the considerable need for an appropriate structure for the implementing partners, especially at national level.