EU Investment Plan of the Greens/EFA group €750bn to stimulate the sustainable transformation of the EU economy
The Greens welcomed the initial idea of an investment plan, proposed by Jean-Claude Juncker. Drawing on the lessons learned from other recovery plans in 2009 and 2012, we want to ensure this new plan is made more concrete and focused on the transformation of our economy in a way that is socially just and environmentally responsible. To this end, the Greens have outlined our own proposals for an investment plan for Europe.
How much money and why?
Our investment plan entails a package of €750 billion for the period 2015-17, with 1/3 coming from the public sector and the remaining 2/3s from the private sector. This should be fresh funds and not the recycling and repackaging of existing spending. The plan should not lead to an increased tax burden on households or the increasing of national debt or deficits, as it should be realised through deferred tax credits (frontloading) and the creation of an energy savings fund. The plan could thus be deployed as part of the existing budgetary commitments of EU member states.
Such an investment is essential to enable the economy to renew its potential, to escape a deflationary spiral and to stimulate the sustainable transformation of our economy.
In concrete terms, the goal of the plan is to create a green energy union (based on energy efficiency and renewable energy), to reorient our economy and to stimulate social and green innovation. The investments are focused on areas that will enable EU member states to achieve the goals set out in the Europe2020 strategy (employment, social inclusion, education, R&D, energy and climate).
The plan should lead to increased purchasing power for citizens and improved sustainability of public finances.
Who are the targeted beneficiaries?
- The growing number of European citizens faced with energy poverty (currently 10-11%)
- Small and medium-sized enterprises, which will benefit in substantial economic terms from a better use of resources (energy and non-energy): the European Commission has estimated that Europe could reduce its resource consumption by more than 17%, which would lead to savings of €23 billion per year for businesses and create up to 2.8 million jobs.
- Public services, particularly schools, hospitals and social housing, as well as public infrastructure supporting the development of a smart electricity grid, the roll out of renewable energy or cross-border railway infrastructure for example.
Deferred tax credits and energy saving funds (see table)
Repayment ofpart of theperceived benefit(difference between lending ratesbefore and after the crisis) by countries that havebenefited from 'abnormally'low rates due tocapital outflows fromcountriesconsidered lessrobust
Gradual reduction of subsidies to fossil fuels and other polluting activities
Fixing of an incentivising carbon price
National energy saving funds (as a prelude for European energy saving funds) based on deferred tax credits (expiring after 5 years, quasi money; max. €250bn minus capital and guarantee contributions to EIB).
Additional sources of finance
Increasing the lending capacity of the European Investment Bank to €400bn (from €200bn) over 5 years, with guarantees from member states (max. €125bn)
A European private placement system targeted at small and medium-sized enterprises
Fighting tax fraud, evasion and avoidance; tax harmonisation (company profit)
Revision of European economic governance
Structural reform of the banking sector
Fighting social dumping by coordinating salary increases across Europe
Promoting renewable energies and resource efficiency
Conditionalities attached to advantageous loans from the European Central Bank (TLTRO)
The creation of bank-insurance partnerships (with different policy maturities)
Green public markets targeted at small and medium-sized enterprises
Stock exchanges for SMEs
Prolonging the plan
The mid-term review of the EU's multiannual financial framework, as well as the next framework, should be used to prolong the dynamic created by the investment plan.
At the same time, the basic principles of the plan will continue to have positive effects in the longer term.
Using these objectives and instruments agreed and developed at EU and national/regional level as a basis, Member States will choose investment priorities and their means of implementation through a collective and inclusive deliberation (consulting parliaments and involving civil society). The particular challenges faced by EU member states in reaching the targets set out in the EU2020 strategy should orient how the overall investment priorities are implemented at national and regional level. In order to achieve these European level goals, there is a need to provide specific recommendations to member states, for which the EU Commission should take responsibility.