Following the approval by the European Parliament on June 24, the adoption by the EU member states paves the way for new investments to begin in mid-2015.
Presented by European Commission President Jean-Claude Juncker in January this year, the investment plan is designed to stimulate 315 billion euros of investment for the EU to support innovative projects and infrastructure update.
EFSI, the financial basis of the plan, is intended to stimulate participation by private investors. By taking on part of the risk through a first-loss liability, it is expected to achieve an overall multiplier effect of 1:15 in real investment.
The finance ministers agreed upon the operation rules of the fund, including in particular the budgetary allocations to the EFSI guarantee fund, the range of projects, and the governance of the fund.
"In the current economic context, there is a clear need to boost investment," said Janis Reirs, the finance minister of Latvia and president of the meeting.
"With an enhanced risk-bearing capacity, this new fund will create the conditions needed for the private sector to become involved," said Reirs.
Investment from third parties are welcomed while the regulation requires third parties to contribute in cash. However, contributions will not entail any influence over the fund's governance, the statement said.
According to the EU statement, signature of the EFSI regulation is foreseen before the end of June, allowing it to enter into force at the beginning of July 2015. The first EFSI operations are expected as early as mid-September. (1 euro = 1.12 US dollars)
Source:Xinhua - globaltimes.cn
26/6/15
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