EU Works on €200bln Growth Plan

The European Union is working on a plan to pump 200 billion Euros ($265.19 billion) in investment into infrastructure, green energy and high technology.

The plan was due to be unveiled at an EU summit in June along with options to finance it ranging from recapitalizing the European Investment Bank to issuing Euro-bonds, investment vehicles or setting up a European infrastructure agency.

“If the markets allow no leeway, then we need to fall back on imagination to return to growth policies. Institutional investors want attractive options to be presented to them, and with the EU stamp all this money would be channeled into European projects,” an EU source said.

One option was to ask member states to contribute 10 billion Euros in order to recapitalize the EIB, which would boost its lending capacity by 60 billion Euros, which would in turn pave the way for 180 billion in investments.

Another alternative was using 12 billion Euros left over from the European Financial Stability Mechanism (EFSM) – after bailing out Greece, Ireland and Portugal – as leverage to rise up to 200 billion Euros from the private sector, as Reuters stated.

The 12 billion euro remainder could also be used as “hybrid capital” for the EIB to back public-private partnerships in infrastructure spending financed by project bonds.

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