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STRASBOURG, France (Reuters) - The European Commission presented a plan on Wednesday for some 300 billion euros ($375 billion) of largely private new investment in the European Union, saying it was time to kick-start growth without adding to public debt.
Underlining the need to pursue structural reforms to ailing economies and pare back debt and deficits run up during the financial crisis, the EU's new chief executive said his plan was the third leg of a strategy to get Europeans back to work.
"Europe needs a kick-start and today the Commission is applying the jump leads," Commission President Jean-Claude Juncker, a conservative former prime minister of Luxembourg who took office this month, told the European Parliament.
He acknowledged criticism that the plan lacks a major new public spending component. The EU is setting aside just 8 billion euros and the European Investmet Bank 5 billion to help provide 21 billion euros of capital for a special fund to be managed with the EIB.
The cash is to unlock 300 billion euros of investment over the next three years to create a million jobs.
The parliament's main political groups cautiously welcomed the plan, saying that while they would have liked the capital of the investment fund to be higher, it was still a good start.
But far right and left-wing deputies and the Greens criticised it, saying the leverage effect of 15 times was a fantasy and that it made risks public and profits private.
"This package is just empty words," said Dimitris Papadimoulis of the European United Left. "There is not one euro of fresh money in there."
"It's a farce, it's recycling and re-labelling. It is useless, and it's hocus-pocus and abracadabra," said Gerolf Annemans from the Belgian Vlaams Belang party.
Juncker insisted the EU was not just "moving money around" but putting funds to better use. Adding to public debt would not help. "We don't have a money-printing machine. We need to attract money to make it work for us," he said.
Europe is in an "investment trap", Juncker added, with private investors hesitating to commit funds despite being awash with liquidity, some of it provided by the European Central Bank as it tries to stave off deflation.
By providing guarantees to absorb the initial risks of key projects that could improve Europe's infrastructure, Juncker said the EU could draw in more private investment.
The 315 billion euros was not a cap on the ambitions of the European Fund for Strategic Investment, he said. Governments can contribute to its capital and such contributions would not be counted into their national deficit under EU budget rules.
(1 US dollar = 0.8018 euro)
Additional reporting by Robin Emmott and Alastair Macdonald in Brussels; Writing by Alastair Macdonald; Editing by Philip Blenkinsop