Investment plan to inject some €315 billion into the EU in next three years

The European Fund for Strategic Investments (EFSI) is projected to inject some €315 billion into the EU in the next three years, according to European Commission estimates.

Speaking at a debate organised by the Malta Business Bureau and the European Commission, about the investment plan for Europe, Commissioner Karmenu Vella said that EFSI would support Small and Medium Enterprises in the country, which he called the "lifeblood of European economies."

"The plan will have two main focuses; creating the right infrastructure and providing SMEs with the necessary financing," he said, adding that the Maltese economy had over 29,000 SMEs.

The European Commission's vice president for jobs and investment, Jyrki Katainen, said that EFSI was the flagship project of the Junker Commission. 

"The plan was developed as the EU began suffering from low levels of investment following the global economic and financial crisis, when investments had dropped by around 15% compared to the peak in 2007, due to lack of competitiveness, changes in banking regulations and such," he said, adding that weak investment is believed to slow economic recovery in the short term and hinder growth in the long term. 

Katainen explained that the plan focused on three objectives; widening the single market, providing more visibility and information about investment projects and making better use of new and existing resources. 

"The Commission will be working to widen the single market through different areas, including the harmonization of products and services, focusing on the creation of a capital market, creating a better energy market both in renewable and other kinds of energy, and finally a creation of a globalized market for secondary raw materials," Katainen said. 

He added that research had started into an EU-wide project, such as a website, to provide visibility and technical assistance to investment projects, which would allow investors to find the information they need. 

He also added that the fund would focus on high-risk, mostly private loans, with the main aim to help the private sector invest. 

"The plan can potentially create between one and 1.3 million new jobs in the coming years," he said, adding that the infrastructure and PPP projects were also necessary for the development of the country's economy. 

Vella also explained that the initiative would also present opportunities for the blue economy, with its integration with the national maritime policy, which focuses on food, logistics, services and energy. He explained that the blue economy dealt with tourism, as well as energy.

"Initiatives like solar power can receive a further push through this initiative," Vella added.

He further explained that new environmental projects were needed in order to try and achieve new changes like reducing the EU's dependence on other countries for the provision of things like raw materials. 

President of the Malta Business Bureau Mario Spiteri said that the debate was relevant to the local sector due to uncertainty in the economic climate of most EU states. 

"The investments will impact infrastructure, transport networks, education and many more," SPiteri said. 

"Since 2004, Malta's private sector has been below EU average, and the plan is hoped to boost private investments in the country in spite of the uncertainty around the eurozone."

Members of the EFSI committee are expected to be in place by September, and that the European Investment Advisory Hub was expected to be up and running by autumn.