EU unveils R4.2 trillion stimulus plan

Published Nov 26, 2014

Share

Brussels - The European Union's executive Commission on Wednesday proposed a 315-billion euro (R4.2 trillion) investment plan to boost the bloc's flagging economy, with some 21 billion euros in seed money coming from EU institutions.

European Commission President Jean-Claude Juncker said Wednesday that the long-awaited plan will be based on EU guarantees that should entice private investors to fund projects benefiting education, transport, the digital economy and the environment.

Juncker said the European Investment Bank will be the “prime mover” in delivering seed money for those investments over the next three years.

Juncker estimated that every euro invested could generate investment of about 15 euros.

Juncker said a message needs to go out to the people of Europe and the rest of the world: “Europe is back in business.”

The plan will now be discussed by the 28 EU leaders at the December 18-19 summit.

After years of focusing primarily on cutting debt, the move toward investment is seen as an important message to lift the continent out of its economic quagmire.

“We are offering hope to millions of Europeans disillusioned after years of stagnation,” Juncker told the European Parliament in Strasbourg, France.

Investment levels in the EU are down some 370 billion euros ($465 billion) compared with when the financial crisis hit Europe half a decade ago.

And while investment is back on the rise in the United States, Europe is lagging behind.

“Why? Because investors lack confidence, credibility and trust,” Juncker said.

He insisted the plan would not rely on creating more debt, which already stands at some 90 percent of gross domestic product in the EU. - Sapa-AP

Related Topics: