AFP, Brussels :
EU leaders approved an ambitious investment plan Thursday but without putting up the “hard cash” demanded by European Commission head Jean-Claude Juncker.
Leaders of the European Union’s 28 member states meeting in Brussels as expected approved the broad outline of Juncker’s 315 billion euro ($387 billion) investment plan, intended to kick-start growth in Europe by financing hundreds of projects.
European President Donald Tusk, who presided over his first EU summit, said leaders had “called for the urgent establishment for strategic investment”, which would formally create the new fund at the heart of the Juncker plan.
Along with a commitment to reform and sound public finances, Tusk said the plan would “form our strategy to speed up our recovery” of a European economy stuck at near-zero growth and flirting with deflation.
“We can now start with the investment programme,” said influential German Chancellor Angela Merkel, arriving for the talks.
“The first proposals are on the table for the frame, which now has to be filled with concrete projects,” she said.
The plan is based on 21 billion euros in seed money from the EU budget and the bloc’s European Investment Bank (EIB), which Juncker expects to leverage to the 315 billion figure with private investment.
But the initial stake could be boosted considerably if member states put their hands in their pockets.
Leaders however said they would wait for the plan’s details, to be negotiated in the coming months, before committing national funds.
“It is too early. The details will be the devil,” said Lithuanian President Dalia Grybauskaite.
Finland Prime Minister Alexander Stubb said his country planned no contribution.
Juncker, who took office on November 1, has been urging leaders to put up “hard cash” to back his plan, which was first unveiled last month and is central to his five-year agenda as head of the EU’s executive arm.
The plan is built on a complex mechanism intended to attract private investors to risky and overlooked projects that meet the EU’s longer term goals.
The scheme’s cornerstone will be the new European Fund for Strategic Investments, which leaders formally endorsed at the summit.
The new fund “is not the magic solution to Europe’s investment crisis,” said Werner Hoyer, president of the EIB, which will play a central role in the Juncker plan.
To encourage member states, Juncker’s plan promises that contributions would not be counted as part of their national budgets, many of which are in breach of deficit rules which Brussels has tightened up considerably during the debt crisis.
“I read that some prime ministers have expressed that the volume of the package is a bit measly,” Juncker said, arriving to the summit.
But as contributions would not count against the budgets of cash-strapped nations, “there is almost no reason for member states not to contribute to the financing,” Juncker added.
Despite their reticence to put money on the table, member states leapt at the opportunity to submit projects for funding.
