EU leaders agree investment package to boost economy

Brussels: European Union leaders endorsed a new investment programme intended to kick-start economic growth in the bloc at a summit in Brussels, which its chairman said would end late on Thursday, half a day earlier than planned.
We agreed three things: one, we call for the urgent establishment of a European fund for strategic investments; two, a renewed commitment to intensify structural reforms; three, continued efforts to ensure sound public finances,” European Council President Donald Tusk said in a video statement.

“The European Council takes note of the favourable position the Commission has indicated towards such capital contributions in the context of the assessment of public finances under the Stability and Growth Pact,” the text read.

While a formal Commission interpretation of how EU budget rules should treat such investment will only come in January, Commission Vice President Jyrki Katainen told Reuters in an interview on Thursday that fund contributors would not face negative consequences in budget assessments.

The fund, called the European Fund for Strategic Investment (EFSI), will be launched next year with 21 billion euros (USD 25.8 billion) of EU money. It is intended to attract 15 times more private capital for financing projects in energy and transport infrastructure as well as education and research.

The EFSI, whose final go-ahead to start operations is to come in June 2015, is designed to help boost feeble European growth and create jobs without inflating public debts.

EU leaders also discussed how the EFSI should choose which projects in Europe to finance and decided that decisions should be based only on business criteria.

German Chancellor Angela Merkel was clear she wanted no politics in the selection: “It should not be decided politically, but on the basis of business criteria,” she said.

Tusk said no sectoral or geographical criteria for project selection were discussed.