ERU, Alm.del - 2015-16 - Endeligt svar på spørgsmål 246: Spm. om regeringens redegørelse for og vurdering af den kommende status for Junckers investeringsplan, til erhvervs- og vækstministeren, kopi til finansministeren

Erhvervs-, Vækst- og Eksportudvalget 2015-16
ERU Alm.del
Offentligt

EUROPEAN

COMMISSION

Brussels, 1.6.2016

COM(2016) 359 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN

ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE

REGIONS

Europe investing again

Taking stock of the Investment Plan for Europe and next steps

ERU, Alm.del - 2015-16 - Endeligt svar på spørgsmål 246: Spm. om regeringens redegørelse for og vurdering af den kommende status for Junckers investeringsplan, til erhvervs- og vækstministeren, kopi til finansministeren

1. Introduction

Jobs, growth and investment are one of the Juncker Commission's 10 key priorities. The

Investment Plan for Europe

was presented on 26 November 2014

and initiated concerted

and targeted action to stimulate financing for investment, with the support of the European

Investment Bank (EIB) and the European Investment Fund (EIF) – together, the EIB Group –,

as part of the virtuous triangle of structural reforms, responsible fiscal policies and

investment. The purpose is threefold: making sure that scarce public resources are used to

mobilise private investment to target market failures in an efficient manner by crowding-in

private capital, ensuring that investments reach the real economy, and improving the

investment environment at the European level as well as at the level of individual Member

States. The European Council endorsed the Investment Plan with all its components in

December 2014, calling for a swift delivery

. The EIB Group heeded the call of the European

Council and started investment activities under the plan as of January 2015. The European

Parliament and the Council subsequently adopted the necessary legislative proposal with

exceptional speed in July 2015

. Time has now come to take stock of the progress made and

look ahead.

In the 18 months since the Investment Plan was presented, the conditions for an uptake

in investment have improved and confidence in Europe's economy and growth are

returning.

The European Union (EU) is now in its fourth year of moderate recovery, with

GDP growing at 2% in 2015

. While the level of investment in the EU dropped significantly

as a consequence of the financial crisis, there are early signs of recovery in spite of global and

domestic risks to growth. The comprehensive efforts initiated with the Investment Plan are

already delivering concrete results, despite the fact that macroeconomic effects of larger

investment projects cannot be immediate. Investment is expected to continue to pick up

gradually throughout 2016 and 2017 although it remains below historically sustainable levels

(see Chart 1).

COM(2014) 903 final

EUCO 237/14, available at

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/146411.pdf

Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2016 on the

European Fund for Strategic Investments (EFSI), the European Advisory Hub and the European

Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 – the

European Fund for Strategic Investments (OJ L 169, 1.7.2015, p.1).

The Spring 2016 European economic forecast is was published on 3 May 2016 and is available at

http://ec.europa.eu/economy_finance/eu/forecasts/2016_spring_forecast_en.htm

Chart 1. Investment trends in the EU

Note: Real gross fixed capital formation (GFCF), Baseline vs. historical norm, EU, in 2013 prices, EUR billion

This positive momentum must be maintained and efforts need to be continued to bring

investment back to its long-term sustainable trend.

The mechanisms of the Investment

Plan work and must be reinforced to continue the mobilisation of private investments in

sectors critical to Europe's future and where market failures remain. This includes investments

in the areas of energy, environment and climate action

, social and human capital

and related

infrastructure, healthcare, research and innovation, cross-border and sustainable transport, as

well as the digital transformation. The EU has clear and unique assets which are crucial for

investment: the Single Market, the most skilled population in the world, a high level of social

and environmental protection, as well as stable, predictable, efficient and transparent legal

systems. While there is no silver bullet that can ensure that the full potential for EU

investments is exploited within only a few months’ time, the encouraging results delivered in

a short period of time provide a sound basis for future policy initiatives on both the use of the

EU budget and the regulatory environment.

This is in line with the EU's strong commitments reiterated at the Paris climate conference in December

2015.

The forthcoming "New Skills Agenda for Europe" will address the specific question of investing and

improving skills and human capital in a broader context: while there is broad agreement that skills fuel

R&D, innovation, employability and competitiveness, evidence shows that a significant share of the

European workforce (c.20%) has only a low level of basic skills. This makes it hard to employ these low-

skilled workers and contributes to structural unemployment. At the same time, many vacancies remain

unfilled due to shortages of skilled labour. This points to a structural investment gap in human capital.

Equipping more people with better and more relevant skills requires appropriate funding alongside

structural reforms to improve the efficiency of education and training systems.

2. A model for the future

a. A rapid and comprehensive set-up

The Investment Plan has already started to deliver tangible results thanks to the rapid set-up of

all its components:



The

European Fund for Strategic Investments (EFSI),

implemented and co-

sponsored by the EIB Group, is firmly on track to deliver the objective of mobilising

at least EUR 315 billion in additional investments in the real economy by mid-2018.

The market absorption has been particularly quick under the Small and Medium-sized

Enterprises (SME) window where the EFSI is delivering well beyond expectations.

The Commission has issued guidance on how

European Structural and Investment

Funds

(ESI Funds) can be combined with the EFSI to support additional investments.

A first set of projects is being developed which shows how this combination works in

practice. This will also support the objective mentioned in the Investment Plan to

increase the use of financial instruments under the ESI Funds.

The

European Investment Advisory Hub (EIAH)

, a joint initiative of the

Commission and the EIB, delivers 360-degree technical assistance and advisory

service and has already dealt with more than 160 requests. Whilst this is a promising

start, steps are being undertaken to bring the advisory services closer to the final

beneficiaries and increase EIAH services in specific areas with unmet needs (including

cross-border projects).

The

European Investment Project Portal (EIPP)

, an online platform bringing

together European project promoters and investors from the EU and beyond, has been

launched and is increasing the visibility and the financing opportunities for investment

projects across Europe.

Finally,

the Commission has already tabled a number of initiatives to help

supporting investment and facilitating the financing of the economy,

such as the

lowering of capital charges for insurance and reinsurance companies as regards

infrastructure investments and the adoption of practical guidance on the application of

State aid rules in the context of public funding of infrastructure and public-private

partnerships (PPPs). In addition, the

Energy Union, the Capital Markets Union, the

Single Market and the Digital Single Market

Strategies, and the Circular

The delivery of the EFSI was accelerated in line with the transitional provision of Regulation (EU)

2015/1017.

http://www.eib.org/eiah/

https://ec.europa.eu/priorities/european-investment-project-portal-eipp_en

See the Communication "Delivering the Single Market for Jobs, Growth and Investments", also adopted

today.



Economy package

all contain specific measures that will remove concrete obstacles

and further improve the environment for investment, if fully implemented. The

Commission has also engaged in a structured dialogue with Member States to help

removing national obstacles to investment in the context of the

European Semester

in areas like insolvency, public procurement, judicial systems and the efficiency of

public administration or sector-specific regulations.

b. The European Fund for Strategic Investments: using scarce resources in a

more efficient way

Concrete and tangible results

The EFSI

is already supporting additional EIB Group investments in key areas for EU

sustainable growth.

Around 250 transactions have been approved under EFSI in 26 EU

Member States

, which are expected to mobilise EUR 100 billion in total investment,

representing around 32% of the overall objective of EUR 315 billion in new investments over

three years. It has been successful in crowding in significant additional finance (85% of the

total investment mobilised) from private and public investors. The lists of projects under both

EFSI windows are all accessible to the public

. The EFSI supports projects that contribute to

addressing existing market failures and suboptimal investment situations, as well as many of

our most pressing societal challenges.

Additionality is a fundamental feature of the EFSI guarantee that needs to be

strengthened in the selection of projects.

EIB projects receiving budgetary support through

the EFSI must be 'additional' in the sense that they point to a market failure or suboptimal

investment situations and therefore would – in principle – not have been financed in the same

The set of country-specific recommendations for the Member States adopted by the Commission in May

put a particular focus on investment, asking where relevant to address shortfalls in investment, notably in

infrastructure and in intangible assets, as well as to adopt and implement the needed structural reforms to

improve the investment environment, which are complementary with action at EU level. See COM(2016)

321 final.

As it is inherent in the business model of the EIB to mobilise private sources for financing projects in

order to maximise the use of scarce public resources the available EUR 16 billion EU budget guarantee

and the EUR 5 billion contribution from EIB are the basis for attracting significant private capital.

The overview is available at http://www.eib.org/efsi/index.htm. These projects were approved by the EIB

Group and vetted by the EFSI Investment Committee (or the Commission prior to the establishment of

the Investment Committee). Some of the projects are not yet signed. Final figures may thus vary.

For the Infrastructure and Innovation Window the list of approved projects is available at

http://www.eib.org/efsi/efsi-projects/index.htm.

For the SME window, the list of agreements signed with

intermediaries is available at

http://www.eif.org/what_we_do/efsi/index.htm.

More information per sector

and Member State can be found online, at

http://ec.europa.eu/priorities/jobs-growth-and-

investment/investment-plan_en

period by the EIB without EFSI support, or not to the same extent

. To this end, a number of

indicators and guiding principles are used by the EIB and the Investment Committee

when

assessing eligibility criteria. The level of risk is an essential element of how to assess the

additionality of projects supported by the EFSI guarantee. All operations approved by the EIB

so far carry a risk corresponding to so-called EIB Special activities

. As a result, the EIB has

been able to increase the volume of its portfolio of higher risk/Special activities, from around

EUR 4 billion to more than EUR 20 billion per year so far. The EIB Group is also developing

new products focussing on new ways of collaboration with National Promotional Banks,

Investment Platforms and with new types of beneficiaries in order to address financing needs

in a variety of sectors.

The geographic and sectorial coverage should be enhanced.

Whilst the EFSI does not

work with quotas, the current sectorial and geographic coverage (see Chart 2) should be

further developed as the implementation of the EFSI moves forward. The combination of the

EFSI with other EU funds as well as the establishment of Investment Platforms should be

conducive to a truly balanced geographical coverage. Also, the EIAH can be an effective

means to progressively mobilise the expertise required and help developing better projects, in

particular for regions or sectors where additional outreach and technical capacity may be

needed.

The EFSI is supporting the European Investment Fund (EIF) to help exceptional

numbers of European SMEs to access finance.

The SME window of the EFSI has made a

particularly swift start, exceeding expectations and confirming the high market demand.

Within one year, the EFSI has supported EIF transactions that are expected to mobilise a total

investment value of EUR 49 billion, which is already more than 65% of the target of EUR 75

billion to be reached over three years

. Today, already more than 140,000 SMEs and mid-cap

companies in 26 Member States are expected to benefit from the EFSI.

See Article 5 of Regulation (EU) 2015/1017. Further guiding principles are outlined in the EFSI

Scoreboard of Indicators: Commission Delegated Regulation (EU) 2015/1558 of 22 July 2015

supplementing Regulation (EU) 2015/1017 of the European Parliament and of the Council by the

establishment of a scoreboard of indicators for the application of the EU guarantee (OJ L 244 19.9.2015,

p.20).

The Investment Committee of the EFSI is the Committee composed of eight independent experts

responsible for approving the use of the EU guarantee under the EFSI. The CVs of its members are

available at

http://www.eib.org/efsi/governance/efsi-investment-committee/index.htm

Special activities are activities for which the EIB internal rating is below investment grade, i.e. riskier

activities than EIB normal operations.

Through the front-loading of the EFSI on of Horizon 2020 InnovFin and COSME SME guarantee

schemes and the reinforcement of the EIB Risk Capital Resources Mandate.

Chart 2. Key EFSI figures as of end-May 2016

EFSI sectorial coverage

(% of approved EIB Group financing under the EFSI)

EFSI geographic coverage

Going forward

The EFSI's potential to play an even stronger role for sustainable finance needs to be

fully exploited.

Europe requires significant new long term and sustainable investments to

increase its productivity and shift to a low-carbon and resource-efficient economy

. This also

includes support of the green/sustainable bond market, in which the EIB is the world's largest

bond issuer. The EFSI, also in combination with other EU funds, and in the context of the

Capital Markets Union, provides a new impetus to this shift by increasing the number and

volume of sustainable projects to be financed in line with the ambitious goals of the Paris

This includes incentives that support the integration of environmental externalities into the financial

market decision processes.

climate agreement

. Technical assistance can also play an important role in these and other

sectors like digital infrastructure.

Building on the success of the SME window, new financial instruments are under

development to support a broader spectrum of innovative SMEs and mid-cap

companies,

including an equity product, which will enhance access to equity financing for

innovative and fast growing SMEs and mid-cap companies. In this context, the Commission

is also working with the EIF with a view to establishing a Pan-European Venture Capital

Fund-of-Funds that will combine public finance with greater volumes of private capital to

bring additional scale and stimulus for the support of the most promising new enterprises,

complementing existing actions by the EIF. This Fund-of-Funds will operate on commercial

terms and will aim at helping to overcome the fragmentation and limited scale that currently

hamper the development of an EU Venture Capital asset class. In line with the EU's social and

skills agenda, other new instruments will be targeted at supporting social enterprises and

microfinance. Furthermore, products will be developed to support securitisation transactions

mobilising additional finance for SMEs, and to enhance the access to finance by innovative

SMEs and small mid-cap companies through guarantees for un-collateralised loans.

The use of the EFSI model to mobilise investments in developing third countries should

be explored.

Regulation (EU) 2015/1017 limits the scope of EFSI investments to EU

Member States and cross-border investments with neighbouring countries. However, a

distinctive but similar scheme could prove useful also for the EU's external cooperation

programmes. The Commission will assess the possibilities for using an EFSI-type model for

investments in third countries, i.e. a scheme that would allow international financial

institutions (IFIs) to address specific bottlenecks to investment and in that way crowd-in

private actors. It could also enable different IFIs to expand operations in challenging

investment environments, such as fragile and post-conflict countries, as well as in migration-

related projects. In its assessment the Commission will take into account the functioning of

and complementarity with existing investment programmes at EU level (such as the EIB-

managed investment facility for African, Caribbean and Pacific countries, the investment

facilities managed by the European Commission and the loan/guarantee programme of the

EIB).

c. Ensuring complementarity at all levels to unlock additional investments

Complementarity

Complementarity between the EFSI and other EU funds is a key part of the

Commission’s overall commitment to ensure a better use of EU funds across all policy

areas

The combination of EFSI support and other sources of EU funding can cover

New pilot instruments such as the Private Finance for Energy Efficiency (PF4EE) and the Natural Capital

Financing Facility (NCFF) can help show the way.

The 2014 Communication "An Investment Plan for Europe", recommended Member States to commit to

increase significantly their use of innovative financial instruments in key investment areas such as SME-

different types of risk of a given project, and thereby attract more investors. Co-investment in

EFSI projects can take place either at project level or at the level of an Investment Platform.

These Platforms can help finance smaller projects and bundle funds from different sources to

enable diversified investments with a geographic or thematic focus. They can also render

smaller or local investment opportunities financially attractive to new investor groups, for

example pension funds or overseas institutional investors.

First examples of Platforms

include a Fund set up in February 2015 to boost productive investment in France. This Fund

aims to support, together with private partners and funds from the French state, newly created

companies in order to finance their transition to the industrialisation phase of new

technologies and new sectors. The objective is to promote the development of new industrial

opportunities, enhancing competitiveness and support the development of industrial clusters

in particular with respect to the ecological and energy transitions. Other EFSI Investment

Platforms are under preparation.

Combining EU Funds with EFSI support

The Commission will take further action to ensure that EU funds and EFSI support can

be easily combined.

Such combinations, in particular in the case of ESI Funds, can be

particularly useful to ensure a wide geographical coverage of the EFSI. The Commission has

already published concrete guidance on this matter

and will continue to further simplify the

overall framework to develop such combinations. For instance, the Commission is preparing

proposals to change the Common Provisions Regulation governing the combination of ESI

Funds with the EFSI to facilitate their use in EFSI Investment Platforms, the combination of

ESI Funds and EFSI in blended instruments, and encourage the general use of financial

instruments. The establishment of smart specialisation platforms (e.g. for industrial

modernisation) will facilitate this further.

Beyond ESI Funds, the Commission, in cooperation with the EIB Group and EIAH, is also

exploring ways to further facilitate the blending and combination of funds available under

other EU programmes (as for example the Connecting Europe Facility (CEF)

or Horizon

support, energy efficiency, Information and Communication Technology, transport and R&D support.

This would achieve an overall doubling in the use of financial instruments under the ESI Funds for the

programming period 2014-2020.

The EFSI Steering Board has adopted a set of rules applicable to EFSI operations with Investment

Platforms and National Promotional Banks, available at

http://www.eib.org/attachments/strategies/efsi_steering_board_rules_applicable_to_operations_with_inve

stment_platforms_and_npbs_or_institutions_en.pdf

http://ec.europa.eu/regional_policy/sources/thefunds/fin_inst/pdf/efsi_esif_compl_en.pdf

Regulation (EU) No 1316/2013 establishing the Connecting Europe Facility, amending Regulation (EU)

No 913/2010 and repealing Regulations (EC) No 680/2007 and (EC) No 67/2010. Since the beginning of

2015, 4 projects have been approved using the CEF Debt Instrument (or the legacy financial instrument

Project Bond Initiative-PBI). These projects leverage total investments for EUR 1.8 billion additional to

the investment mobilized by the EFSI.

2020

) with EFSI opportunities in order to unlock additional investments. This combination

and blending could lead in particular to additional investments through Investment

Platforms

, SME risk-sharing instruments, and to projects with high EU added value

Mobilising co-financing from Member States

In partnership with the EIB Group, National Promotional Banks (NPBs) play a key role

in the implementation of the Plan

given their complementary product ranges, local

knowledge and geographic reach

. Nine Member States

have so far committed to co-finance

projects in the context of the EFSI mostly via their NPBs for a total of EUR 42.5billion.

Under the SME window, the EIF is currently developing additional cooperation models with

NPBs in the areas of equity investments and SME securitisation, with a view to further

increasing the involvement of NPBs in the achievement of the EFSI's objectives.

Accommodating capital inflows in Europe

The EFSI is part of the EU's open economy and is open to co-investments from third

parties

(both at the level of projects or Investment Platforms) in non-exclusive terms,

provided that the EU's guiding principles and legislative framework are fully respected. The

Commission and the EIB have developed technical options to accommodate co-investments

from sovereign wealth funds. The People’s Republic of China was the first non-EU country to

announce its willingness to contribute to the Investment Plan

and considers doing so through

a co-investment structure. The Commission is open to considering similar options for other

sovereign investors.

Regulation (EU) No 1291/2013 establishing Horizon 2020 - the Framework Programme for Research and

Innovation (2014-2020) and repealing Decision No 1982/2006/EC.

For example in the fields of energy efficiency, smart urban mobility, and innovative technologies such as

regarding alternative fuels and electric vehicles, broadband, as well as infectious diseases.

For example cross-border Trans-European Network projects.

COM(2015) 361 final

In February 2015, Germany announced that it would contribute €8 billion to the Investment Plan through

KfW. Also in February, Spain announced a €1.5 billion contribution through Instituto de Crédito Oficial.

In March 2015, France announced a €8 billion pledge through Caisse des Dépôts and Bpifrance and Italy

announced it will contribute €8 billion via Cassa Depositi e Prestiti. In April 2015 Luxembourg

announced that it will contribute €80 million via Société Nationale de Crédit et d’Investissement, and

Poland announced that it will contribute €8bn via Bank Gospodarstwa Krajowego. In June 2015, Slovakia

announced a contribution of €400 million through its National Promotional Banks Slovensk�½ Investičn�½

Holding and Slovenská Záručná a Rozvojová Banka, and Bulgaria announced a contribution of €100

million through the Bulgarian Development Bank. On 16 July 2015, the UK announced that it will

contribute £6 billion (about €8.5 billion) to projects benefiting from EFSI backing.

http://europa.eu/rapid/press-release_IP-15-5723_en.htm

3. Making investments happen in the real economy with a stable pipeline of

stronger projects

a. Strengthened and more targeted technical assistance to make investments

happen

The

European Investment Advisory Hub (EIAH/the Advisory Hub)

is a joint initiative by

the Commission and the EIB, which provides a single entry point for advisory support - free

of charge for public authorities – for the identification, preparation and development of

investment projects in all sectors and regions in Europe.

The number of requests to the Advisory Hub is increasing: as of end-May 2016 more than 160

requests were received from 26 Member States; around two-thirds are from the private sector.

The Advisory Hub is easily accessible online

and is engaging proactively in priority areas

such as energy efficiency, SMEs, as well as emerging areas such as smart cities or electro-

mobility and broadband. The Advisory Hub devotes a particular attention to public-private

partnerships and cross-border projects.

Chart 3. Requests to the EIAH as of end-May

Number of requests by country

Project-specific requests by sector

http://www.eib.org/eiah/

To deploy the services of the Advisory Hub at national level, the EIB and the Commission

have been working closely with National Promotional Banks as well as with other

international partners such as the European Bank for Reconstruction and Development and

the World Bank both to enhance presence on the ground as well as to provide advisory

support complementary to those areas currently not delivered by the EIB. The EIB is also

developing its network of local external offices which will facilitate the dissemination of

information, and more tailor-made technical assistance at the local level and the

implementation of suitable EFSI products.

The EIB and the Commission will also explore the possibility for the EIAH to advise Member

States in the development of local technical assistance schemes for smaller projects, which

could be possibly be supported by ESI Funds. The Commission will explore with interested

Member States the possibility of strengthening the EIAH network with contributions from

their ESI Funds allocations.

The Commission will also contribute to strengthening the administrative capacity of Member

States to set up public-private partnerships by further facilitating the exchange of good

practices between local, regional, national and EU authorities.

More and improved technical assistance.

In the future, the Advisory Hub has a vital role in

ensuring more streamlined access for beneficiaries by simplifying and merging the underlying

envelopes for technical assistance and directing them to the support most suited to their needs.

Improved synergies between the current dedicated Technical Assistance Programmes at EU

level (for example CEF, Horizon 2020, Jaspers, etc.) could lead to better access for

beneficiaries and may ultimately provide more financial flexibility, lead to more targeted

advice, allowing for improved assistance. Moreover, the Advisory Hub should be further

streamlined to ensure more specific advice and outreach activities, increasing the support and

reach a higher number of potential project promoters where the needs are the greatest. There

is also significant untapped potential to be mobilised for investments in digital infrastructures,

e.g. broadband fibre networks

and large scale demonstrators. More can be done to facilitate

investment in other innovative and sustainable solutions contributing to the development of

smart cities, providing better integration of ICT infrastructure with energy, transport, water

and waste.

b. A new Portal for better visibility of investment opportunities in Europe

Providing greater visibility to Europe's investment opportunities.

In order to match

existing liquidity in the financial markets and investment projects in the real economy, the

Commission has developed a

European Investment Project Portal

(EIPP), where EU

project promoters are given the opportunity to boost the visibility of their projects to investors

Technical assistance specifically for broadband should help in that context, as well as the combination of

CEF broadband, Horizon2020 and EFSI.

worldwide

. This initiative responds to one of the clearly identified structural bottlenecks to

investment in the European Union.

Chart 4. Projects submitted to the EIPP as of end-May

Number of projects by country

Main sector of projects on the EIPP

This initiative supports the policy orientation endorsed in international fora like the IMF, the

G20 and the OECD, which have all underlined the need to create a transparent, forward

looking pipeline of projects that could serve potential investors. In the future, the Project

Portal will also provide links to national and regional pipelines of smaller projects.

The Commission will closely monitor the feedback from the market with a view to

progressively improve the Portal's features and ensure coherence with on-going initiatives

under the aegis of the G20.

The Project Portal is launched on the 1

of June and it is available under

http://ec.europa.eu/eipp.

creating a common meeting point, the Commission seeks to serve both EU project promoters and

international investors. The quality of the projects however will be assessed only by potential investors.

The publication of an investment project on the Project Portal is not a pre-condition or guarantee for

receiving any EU or EIB/EFSI financing support and projects already receiving EU and/or EIB/EFSI

support can still advertise their project on the Portal if additional financing is necessary.

4. Improving the investment environment by removing obstacles to investment and

providing regulatory certainty

In addition to the new approach to funding and the delivery of technical assistance,

concrete actions have been initiated to remove financial, administrative and regulatory

barriers to investment, and further deepen the Single Market.

Improving and diversifying

sources of finance is a necessary, but not sufficient factor. Europe needs to create a regulatory

environment which is predictable, reduces administrative burdens and encourages investment.

These efforts at EU level go hand in hand with Member States’ commitment to continuing

reforms with the aim of removing administrative, financial and sector-specific barriers at

national level, in the context of the European Semester and beyond.

a. Progress at EU level: completing the Single Market and simplifying

existing sectorial rules

Many of the Commission’s key initiatives support these objectives.

Today, the

Commission has issued a Communication, reporting on its work on "Delivering

the Single

Market Agenda for Jobs, Growth and Investment"

. The actions mentioned in that

Communication are essential for the long-term delivery and success of the objectives of the

Investment Plan for Europe. In addition, the Energy Union Strategy

aims at providing a

stable market-based regulatory framework that will support the transition to a low-carbon

economy conductive to investment, notably in flexible and low-carbon generation with the

EU consumers at its core. The necessary legislative measures to implement a stable regulatory

framework to support this transition will be proposed in the course of this year. In parallel, the

Commission's Better Regulation agenda seeks to simplify the legal framework and to reduce

regulatory burden.

As concrete examples of barriers to investment addressed in the context of the Capital

Markets Union, the capital charges for insurers investing in qualifying infrastructure projects

and unlisted European Long-Term Investment Funds have been reduced and the new rules are

already in force

. Further amendments to Solvency II are considered for insurers' investments

in infrastructure corporates. The Commission will evaluate whether it is appropriate to lower

bank capital charges for infrastructure exposures in a similar way, taking into account

discussions on capital treatment of bank exposures in relevant international fora. To facilitate

venture capital investment in Europe, together with the Pan-European Venture Capital Fund-

of-Funds initiative, the Commission will also propose some changes to the venture capital

regulatory framework. Preparatory work will soon be launched on development of European

markets for personal pension products which can become an important reserve of capital for

COM(2016) 361

COM(2015) 80

Commission Delegated Regulation (EU) 2015/467 of 30 September 2015 amending Commission

Delegated Regulation (EU) 2015/35 concerning the calculation of regulatory capital requirements for

several categories of assets held by insurance and reinsurance undertakings (OJ L 85, 1.4.2016, p. 6).

financing long-term investment. To foster sustainable investments in line with the EU's strong

commitments made through the Paris climate agreement, reflections on how to develop the

overall financial policy framework in support of green finance should be taken forward on the

basis of ongoing international work.

These initiatives make investment more sustainable also in line with the need to shift private

investment in support of the transition to a low-emission and climate-resilient economy, as

required under the Paris agreement.

The Commission is also taking action in a number of areas with direct impact on

investment decisions in Europe:

First, in the area of

State aid,

the Commission has clarified that EFSI financing is not State

aid within the meaning of the Treaty, and EIB Group financing under the EFSI does not have

to be approved by the Commission under EU State aid rules. Projects supported by the EFSI

may however also benefit from co-financing by Member States. Such co-financing is, unless

granted on market terms or unless falling within a block exemption, State aid, which must be

approved by the Commission. To support the swift delivery of EFSI support, the Commission

committed to assess Member State co-financing as a matter of priority, completing its

assessment within six weeks of receiving the required information. To offer further legal

certainty to investors as regards the financing of infrastructure, the Commission has provided

practical guidance on what constitutes State aid, in the form of a Communication on the

Notion of State aid. The Notice establishes when public funding of infrastructure is in

principle excluded from the application of the State aid rules

Second, in the area of

public accounting,

Eurostat is actively consulting Member States to

ensure that PPPs both under EFSI and in general, are classified according to the national

account principles behind the data used for fiscal surveillance

, so that they can be structured

in a way that ensures best use of public resources. In cooperation with the Member States,

Eurostat has developed a statistical methodology for the classification of such projects

Furthermore, on request, Eurostat provides ex-ante advice to the statistical authorities in

Member States in order to assess whether PPP projects are to be classified inside or outside

Commission Notice on the notion of State aid as referred to in Article 107(1) TFEU available at

http://ec.europa.eu/competition/state_aid/modernisation/notice_of_aid_en.pdf

The fiscal indicators (deficit and debt) to be used in the context of the Excessive Deficit Procedure and

the Stability and Growth Pact are anchored in the Treaty and are provided by Eurostat. The concepts and

definitions to be used are based on the European System of Accounts (ESA 2010), which is in line with

the international accounting standards and has been adopted by Regulation (EU) 549/2013 of the

European Parliament and of the Council of 21 May 2013 on the European system of national and regional

accounts in the European Union, OJ L 174, 26.6.2013, p.1. It is in the interest of policy makers and of the

public in general that those indicators are calculated according to the highest quality standards, and that

they are comparable between Member States.

Manual on Government Deficit and Debt – Implementation of ESA 2010 – 2016 edition, available at

http://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-GQ-16-001

government accounts (there are examples of both), if useful in cooperation with the EIB. Such

advice is publicly available in order to provide guidance

Going forward, further efforts will be made to engage proactively with key stakeholders and

public project promoters, while safeguarding Eurostat's independence. In particular, advisory

capacity will be strengthened in relation to investments which are co-financed with EU funds

including the EFSI. Moreover, Eurostat is also cooperating with the European PPP Expertise

Centre of the EIB (EPEC) in order to clarify certain aspects of national accounting as regards

the recording of PPPs, to explain accounting rules and to share experiences of PPPs with the

Member States. Guidance specifically addressed to those stakeholders preparing PPP

contracts will be published in the summer. In cooperation with the other services of the

Commission, Eurostat will closely monitor the impact of the public accounting rules on the

creation of PPPs in different sectors. Where appropriate, it will review its guidance in

consultation with the Member States, for instance to take into account the specificities of

certain contractual arrangements, such as Energy Performance Contracting with guaranteed

savings.

Third, as regards

public procurement,

which represents a sizeable market in the EU and

offers a source of potentially significant savings for the public purse, a new EU framework

was adopted in 2014, with a deadline for national transposition by 18 April 2016. The

amended framework, which includes more room for negotiation, clearer rules as regards

contract modifications during the execution of the contract and rules for cross-border projects,

will facilitate project promotion, in particular for projects using EU funding. The new rules

will reduce both the time needed to get EU financing as well as the risk of refused payments.

The Commission also encourages broader uptake of green public procurement to align public

spending with sustainable development objectives

. Going forward, the Commission intends

to put in place by October 2017 a voluntary ex-ante consultation mechanism that will help

contracting authorities making the most of the procurement framework.

Fourth, and more generally, the

design and approval of investment projects

often requires

the involvement of several Commission services, looking at the project from different angles

– e.g. EU funding, public accounting rules, state aid control, environmental permits and

public procurement. Going forward, the Commission will address the perceived complexity of

EU rules and procedures by pursuing a stronger convergence of the timelines of the different

procedures. For this purpose it will create an effective "one-stop-shop" for large infrastructure

This

advice

can

found

here:

statistics/methodology/advice-to-member-states

http://ec.europa.eu/eurostat/web/government-finance-

Directive 2014/24/EU on public procurement; Directive 2014/25/EU on procurement by entities operating

in the water, energy, transport and postal services sectors; and Directive 2014/23/EU on the award of

concession contracts.

More information on green public procurement is available at

http://ec.europa.eu/environment/gpp/index_en.htm

projects where the checks run in parallel towards a common approval date, bringing together

the responsible Commission services in a single investment policy team. Such an approach,

which is already followed to some extent in the field of energy for projects of common

interest, should be extended to major Investment Platforms that involve national co-financing

as well as to large infrastructure projects of EU added-value in other economic sectors such as

transport, including projects supported by the EFSI. The objective of reducing excessive

administrative burden and time to obtain the necessary approvals and appraisals will also be

pursued through on-ongoing fitness checks of EU regulation and new cooperation

mechanisms with Member States. In the same vein, the Commission will explore the

possibility to design a single EU authorisation framework that would directly apply to large

projects with a cross-border dimension or major Investment Platforms that involve national

co-financing replacing a broad range of authorisation procedures at EU and national level.

b. Progress at national level: tackling barriers to investment in the European

Semester

Member States can also do more to improve the framework conditions for investment at

the national level.

The Communication of 18 May 2016

provides an overview of the key

objectives of the 2016 country-specific recommendations. Where available, Member States

should use their fiscal space to increase public investment in areas conducive to growth, such

as infrastructure, health, education and research. At the same time, further actions are needed

to foster private investment and Member States are encouraged to accelerate the adoption of

structural reforms and to tackle investment bottlenecks, such as regulatory and administrative

barriers as well as cumbersome and lengthy approval procedures. In some Member States,

remaining inefficiencies have been identified in the areas of public procurement, taxation

systems, judicial systems and insolvency frameworks. Progress also means identifying a

stable pipeline of projects and ensuring coordination and planning by all levels of national

administration. In the same spirit, the Commission, working with Member States, will map

out and continue work to resolve unjustified national barriers to the free movement of capital

that are preventing a well-functioning Capital Markets Union. A report will be published by

the end of 2016

On 1 July 2015, the European Commission established the

Structural Reform Support

Service

(SRSS) in order to offer technical support to Member States, including capacity-

building assistance for growth-enhancing administrative and structural reforms. The SRSS is

engaging with a number of Member States on concrete technical assistance projects to

identify and remove barriers to investment

COM(2016) 321 final

COM(2015) 468 final

On 26 November 2015 the Commission adopted a proposal for a Regulation on the establishment of the

Structural Reform Support Programme for the period 2017 to 2020 and amending Regulations (EU) No

1303/2013 and (EU) No 1305/2013, COM(2015) 701 final.

A stronger link between EU funds and reform implementation.

In order to further focus

ESI Funds on supporting key economic and social reforms under the 2014-2020 programming

period, the Commission intends to enhance the link to key priorities in the country-specific

recommendations. The approval of the ESI Funds has been subject to the implementation of a

number of reforms (ex-ante conditionalities) in order to facilitate the use and effectiveness of

ESI Funds. The legal framework covering the ESI Funds requires that programmes co-

financed by ESI Funds address all relevant country-specific recommendations. The

Commission will monitor and report on progress towards the agreed objectives by 2017.

5. Looking ahead: a reinforced Investment Plan and EFSI 2.0

Having been fully operational for less than a year, the EFSI is delivering tangible results.

Project promoters have used the EIAH to enhance the quality of their projects and investors

can now access numerous investment opportunities on the EIPP. In addition, the Commission

has tabled a number of initiatives to help improving the investment environment and has

engaged with Member States to remove regulatory and administrative obstacles to investment.

The innovative use of EU funds is paying-off due to the flexibility of the EFSI, the absence of

red tape and the independent selection of projects based on their technical and financial

viability.

According to the Regulation (EU) 2015/1017, the Commission shall review the use of the EU

guarantee by January 2017 and submit an independent review on the functioning of the EFSI,

the EIAH and the EIPP by July 2018 at the latest. However, as set out in this Communication,

some important first lessons can already be drawn.

Against this background, the European Council is invited to endorse the following

priorities:



Given the concrete results delivered, a reinforced EFSI will continue beyond the

initial three-year period

to address remaining market gaps and failures and continue

to mobilise private sector financing in investments crucial for Europe's future job

creation, growth and competitiveness with strengthened additionality. To this end, the

Commission will present the appropriate legislative proposals in the autumn to extend

the duration of the EFSI, bearing in mind the scarcity of budgetary resources.

Given its success, the

EFSI SME-window will be scaled up

quickly, under the

current framework, for the benefit of SMEs and mid-cap companies in all Member

States. The Commission will work with the EFSI Steering Board to use all the existing

possibilities under the EFSI-Regulation to reinforce the SME-window

This includes shifting up to EUR 500 million of the EU guarantee from the Infrastructure and Innovation

window to the SME window; and using the EFSI guarantee to top-up InnovFin and COSME loan

guarantee instruments as well as the EU Programme for Employment and Social Innovation (EaSI). This

will lead to an increase in the overall size of budgetary allocations for these instruments and allowing the

EIF to finance a significant extra volume of operations.





The Commission will explore the possibility of using an EFSI-type model for

investments in

developing third countries.

The

combination of EFSI support and ESI Funds

will be further simplified and

legislative and other obstacles to such combinations will be removed. In particular,

changes to the applicable regulations will be explored within the context of the

upcoming mid-term MFF review

. The Commission and the EIB will work on a list

of flagship projects that would provide concrete examples of such combinations by

end-2016.

The Advisory Hub will be enhanced in order to provide more targeted outreach

and support development of advisory action at local level,

as well as cooperation

with National Promotional Banks. The Commission will consider synergies between

existing EU envelopes for technical assistance in order to enhance the flexibility of

technical assistance provision and allow a rapid response to market needs.

The establishment of

Investment Platforms

will be further encouraged, with strong

engagement from the Commission, the EIB Group, National Promotional Banks and

other relevant actors.

The EFSI will continue to contribute to the development of the market for

sustainable/green projects,

by encouraging in particular the development of a green

bond market in Europe and improved coordination of existing efforts.

The Commission will continue to deliver on its

Single Market priorities.

Together

with Eurostat, the Commission will provide further clarity and review, where

appropriate, relevant guidance as regards accounting aspects of public-private

partnerships.

Member States should also establish clear priorities, prepare concrete investment

projects with the help of the Advisory Hub – in particular as regards cross-border

projects – and structure their projects in an optimal way so as to ensure a greater use of

financial instruments. In the context of

the European Semester process,

Member

States should implement the country-specific recommendations to address national

barriers to investment.



Regular stock-taking by the European Council, the European Parliament, the relevant Council

formations, and cooperation with the European Economic and Social Committee, the

Committee of the Regions, will ensure the necessary political ownership to make sure that

these initiatives continue to produce results. The Commission and the EIB will also continue

to approach key stakeholders at national and regional level to organise dedicated follow-up

This could include the creation of incentives for Member States to top-up EU-level financial instruments

with ESI Funds allocations, moving away from the use of grants where financial instruments provide

more value added, and allow for blending of grants and financial instruments to be combined with EFSI

support where necessary, linking the level of financial support in specific project to their alignment with

EU policy objectives and strengthening ex-ante conditionality.

activities in order to discuss and develop specific solutions, responding to local and regional

needs.

The Commission invites the European Council to endorse all the continued efforts in the

context of the implementation of the Investment Plan for Europe, as set out in this

Communication. It calls on the European Parliament and the Council, as the EU legislator, to

follow up swiftly on all legislative aspects of the Plan.