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THE EU AND
JOBS, GROWTH
AND INVESTMENT

The signing of the European Fund for

Strategic Investments agreement, Brussels,
22 July 2015.

The European Commission’s top multiplier effect achieved by attracting

priority is to get Europe growing again and
increase the number of jobs without creating
new debt.
Since the start of the global economic and
financial crisis, the EU has been suffering
from low levels of investment and high
unemployment.
To address the problem, the Commission,
together with the European Investment Bank,
launched the investment plan for Europe.
A European Fund for Strategic Investments
was created in 2015, with an initial €21 billion
backed by the EU. This will grow thanks to a
private and public investors, triggering
investments of more than €315 billion over
three years. Already after one year, the plan is
expected to mobilise over €138 billion of new
investments across the EU, from big companies
that employ hundreds of people to local small
and medium-sized companies in need of capital
to grow their ideas. Given the success of the
plan so far, the Commission is committed to
doubling the fund and has proposed to increase
the target to at least €500 billion by 2020, with
a commitment to doubling it to €630 billion by
2022 at the latest.

October 2016
WHY WE NEED AN INVESTMENT
PLAN FOR EUROPE
Since the start of the global economic and financial
crisis, the EU has been suffering from low levels of
investment and high unemployment.
In the short term, weak investment lowers economic
growth because it means less economic activity. In
the longer term, it hurts competitiveness and the
economy’s potential to grow. The yearly level of
investment is currently about €300 billion below
what it has been in the past. This fall in investment
was a significant drag on growth and employment
for several years. The low level of investment is still
one of the reasons why Europe’s economic recovery
remains weak.
Investment has remained low even though there is
money available, because investors lack the confidence
to invest. They expect growth in the near future to be
weak, not least because there is uncertainty about
political and economic developments in the EU and
elsewhere. Some EU economies have high public and
private debt. Getting loans or grants is still difficult in
some countries, especially for small and medium-sized
companies. Governments have cut back on investment
due to high levels of public debt, which have increased
from an average of 60 % of gross domestic product
in the EU in 2008 to around 90 % in 2015. That is
why the EU needed to coordinate its efforts to boost
investment and put Europe on the path of sustainable
job creation and solid growth. The investment plan for
Europe was its answer.

The economic crisis saw a very large rise in

unemployment in the EU

10.9  %
of WORKING
POPULATION

26.4
MILLION 8.6 %
of WORKING
PEOPLE
21
POPULATION

6.8  %
of WORKING MILLION
POPULATION PEOPLE
16.1
MILLION
PEOPLE

nJAN 2008 nJAN 2013 nMAY 2016

Of which 4 million
young people
18.6 % YOUTH
UNEMPLOYMENT
RATE
Source: European Commission.
WHAT THE EU
IS DOING It is firmly on track to deliver on mobilising at least
€315 billion in additional investments in the real economy
The Commission’s overall approach is based on three by mid-2018. It is already active in 27 Member States
elements: re-launching investment, pursuing market and is expected to trigger over €138 billion in investment
reforms, and responsible fiscal policies avoiding excessive based on the approved financing so far (October 2016).
public debt. Smaller companies have particularly benefited from it.

The investment plan for Europe is at the heart of this
strategy. It focuses on removing obstacles to investment,
providing visibility and technical assistance to investment
projects, and making smarter use of new and existing
financial resources.
The Commission, together with the European Investment
Bank, launched the investment plan for Europe. A
European Fund for Strategic Investments was created
in 2015, with an initial €21 billion of EU backing. This will
grow thanks to a multiplier effect achieved by attracting
private and public investors, triggering investments of
more than €315 billion over three years.
How does the fund work?
The fund provides guarantees in support of projects
financed by the European Investment Bank. It focuses on
infrastructure, innovation and smaller companies.
The fund provides a guarantee, enabling the European
Investment Bank to invest in more, sometimes riskier,
projects and to invest sooner than without the guarantee.
By October 2016, 134 infrastructure projects
representing financing of €17.4 billion had been
approved under the fund. In addition, more than 220
financing agreements, worth €7.5 billion, had been
approved for smaller companies. Eventually, almost
290 000 smaller companies are expected to benefit
from this finance. Project promoters can apply to the
European Investment Bank for funding, while small
businesses can apply via local financial intermediaries.
One of many good project examples is the Ginkgo
Fund 2, cleaning up contaminated industrial sites
and converting them into homes and offices. Ginkgo
is expected to create around 5 000 housing units
as well as 8 500 jobs in Belgium and France. The
decontamination that Ginkgo carries out is important for
the future of Europe’s cities, where 3.5 million former
industrial sites sit vacant. European Investment Bank
financing under the fund totals €30 million. This support
from the fund attracted private investors to meet the
total project cost of €120 million.
The fund project list can be consulted online.

nHow does the investment plan work?

European Other public

Investment
Bank and private
contributions

€16 + 10 = 26 billion €5 + 2.5 = 7.5 billion

EUROPEAN FUND FOR STRATEGIC

INVESTMENTS
€21 + 12.5 = 33.5 billion

1 x 15
Infrastructure and Small and medium-sized
Innovation enterprises and mid-cap firms

Total investment from 2015 to 2020

€33.5 billion risk bearing capacity > provides around €100 billion
in European Investment Bank financing
> mobilises at least €500 billion in investments.
Commitment to double the Fund by 2022 at the latest

Source: European Commission.

The investment plan not only involves financing, it also
includes tools developed by the EU to help investment
projects reach the real economy.
The European Investment Advisory Hub was
created in September 2015 to provide administrative
and technical support to project promoters throughout
Europe. Project promoters, public authorities and
private companies can receive technical support to
help get their projects off the ground and make them
investment-ready. They can get advice on suitable
funding sources and access a unique range of technical
and financial expertise.
In order to provide investors with more visibility
of what investment opportunities exist in the EU,
the Commission created the European Investment
Project Portal, which went live on 1 June 2016.
Project promoters can submit their projects online,
where they will be visible for relevant investment
opportunities — a kind of match-making service.
European Structural and
Investment Funds
Of course, this is not the only money being invested in
the EU economy. The EU budget has always included
funds aimed at supporting economic and social cohesion,
reducing differences in income, wealth and opportunities,
and generating growth. Perhaps confusingly, these are
known as the European Structural and Investment
Funds. They are separate from the investment plan’s
European Fund for Strategic Investments, but the
two instruments can work very well together and the
Commission encourages this.
In fact, they are made up of five main funds which work
together to support economic development across all EU
countries:
→→ European Regional Development Fund
→→ European Social Fund
→→ Cohesion Fund
nAn interactive version of this publication, containing links to online content, is available in PDF and HTML formatnn
nhttp://publications.europa.eu/webpub/com/factsheets/investment/en/
Questions about the European Union?
Europe Direct can help:
00 800 6 7 8 9 10 11,
http://europedirect.europa.eu
THE INVESTMENT PLAN REACHES THE REAL ECONOMY
https://youtu.be/zfuXOc1E2qc
→→ European Agricultural Fund for Rural Development
→→ European Maritime and Fisheries Fund
Together, these have a budget of €454 billion for 2014-
2020 and are investing in EU priority areas such as
research, development and innovation, support to smaller
companies, the low-carbon economy, and information and
communication technologies.
The structural funds are different from the European Fund
for Strategic Investments in that they finance projects via
grants and financial instruments, and are implemented in
a decentralised way in the Member States. The European
Fund for Strategic Investments provides risk-financing
instruments via the European Investment Bank.
Any project that is economically viable, has a potential to
benefit jobs and growth in the EU, and is in line with EU
priorities for investments, may be eligible for funding from
both the European Fund for Strategic Investments and the
structural funds.
With a reinforced and extended European Fund for
Strategic Investments, even more jobs, growth and
competitiveness will be created and extra focus will be
put on riskier/additional investments critical to Europe’s
sustainable growth.
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© European Union, 2016
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Print ISBN 978-92-79-61526-9 doi:10.2775/313824 NA-AR-16-002-EN-C
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