November 24, 2014
Frankfurter Allgemeine Zeitung has more details on Jean-Claude Juncker’s investment programme this morning. The structure is not fundamentally different from what we reported before, but the numbers are a little different. This is all clearly work in progress.
The paper has talked to a senior official who effectively told them that the plan is “open” – which is, of course, a euphemism for not ready, or rather a euphemism for “no new money”. The money will have to come from the member states, which will be able to choose how they want to contribute to, for examples through their own development banks like the KfW. The article said the European Parliament will be disappointed when Juncker presents his plan on Wednesday because it will not contain any fresh EU money.
The paper writes that the fund will be called “Invest in Europe” and will be managed by the European Investment Bank. The paper also confirmed that the fund will have a first-loss tranche by the public sector. The officials, however, denied numbers that had circulated earlier, whereby the total amount of the public sector involvement would be only €20-30bn. The leverage ratio would instead be around six – which would suggest a public-sector component of around €50bn. Much of the ongoing work was focused on incentivising risk-averse private investors. The projects to be invested in should be proposed by the member states themselves. And Jyrki Katainen will go on a road show throughout the EU to collect the private money.
We also have stories on the latest fraud scandal in Portugal around former PM Jose Socrates; on Front National’s campaign financing from Russia; comments on Podemos chances to win and on radical parties being the only one to advocate Keynesian policies; Mario Draghi’s speech and on what it may, or not mean; on the EU’s Commission’s view on the Italian budget; on the internal disputes within the AfD’s leadership; on the investment gap; and on Germany’s four vetoes.