On 30 January, Jyrki Katainen, the Vice-President of the European Commission – the key person responsible for jobs, growth, investment and competitiveness – visited SAFE and the House of Finance to discuss the EU Investment Plan with students from Goethe University and the Graduate School of Economics, Finance, and Management. Katainen’s visit to Frankfurt was part of his 28-country European roadshow to promote the EU Investment Plan; an initiative which aims to mobilize public and private investments in the real economy of at least €315 billion over the next three years.
Katainen called for more integration in Europe in order to strengthen the Single Market, to increase investment, to support social development (particularly in the areas of education and employment) and to coordinate efforts related to foreign policy and security. He acknowledged that the EU cannot solve all problems by itself – the EU's Member States must also accept responsibility and implement further structural reforms. With respect to the Single Market initiatives of the Commission, Katainen mentioned particularly the markets for digital products, energy markets and capital markets. He also spoke in favor of the planned Transatlantic Trade and Investment Partnership (TTIP) between the United States and Europe. In his view, the agreement would strengthen the role of Europe in the world economy.
In the following discussion, a student voiced the concern that the EU Investment Plan may not help “weaker” European countries but that the money will mainly go to “stronger” countries. Katainen explained that the idea behind the special fund created under the Plan (i.e. the European Fund for Strategic Investments) is to enhance private investment by providing risk sharing and technical assistance for investment projects. In his view, this can also help “weaker” EU countries because there is an especially high potential for growth in these countries.
Another student raised the question of how the Commission will make sure that the fund will not be used to support investment projects that would have taken place anyway but are now “shifted” into the investment plan. Katainen’s response pointed to the fact that the fund will focus on high risk projects that could not be realized without public assistance. In his view, such investments are hindered by, for example, high sovereign risk in some countries. He emphasized that there is no lack of liquidity in Europe but liquidity is not being translated into investments.
On the question whether there will be enough demand for the investment fund to lead Europe back to a higher growth prospective, Katainen replied that further action was needed to stimulate growth. However, in his opinion, the fund could be a first step in the right direction. He argued that the fund will have a positive impact, especially because it is designed to act on a structural basis, rather than as a one-off initiative.
