EU unveils 50 billion euro infrastructure growth plan
By Charlie Dunmore
BRUSSELS (Reuters) - The European Union's executive set out plans on Wednesday to invest 50 billion euros ($68 billion) by 2020 in new cross-border transport, energy and broadband projects which it said would boost growth and employment in the 27-nation bloc.
Total spending on the plan from 2014 and 2020 would amount to just 0.4 percent of EU annual GDP, but the European Commission said it expected the funds to attract extra public and private money by lowering the risk profile of key infrastructure projects.
"Today we are making a down payment for Europe's future growth and jobs," Commission President Jose Manuel Barroso told a news conference in Brussels.
"Europe must help to build the roads, railways, energy grids, pipelines, and broadband networks that are so important to our citizens and businesses," he said.
Barroso also confirmed plans to create "European project bonds" to be used for specific initiatives and designed to help generate additional cash for new infrastructure.
The bonds would be issued by infrastructure project companies -- not the Commission directly -- but EU and European Investment Bank funds would be used to cover part of the project risk, making the bonds more attractive to investors such as insurance companies and pension funds.
"Initially, these will most probably be European investors, but interest from North American institutional investors and various sovereign funds can also be expected," the Commission said in a statement.
The bonds are needed to fill the funding gap left by the collapse in private project financing for infrastructure after the financial crisis, the Commission said, but the European Central Bank has said they could reduce transparency in public finances by increasing liability. Continued...