European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, travels to London on Wednesday evening as part of the 3-day roadshow to promote the Investment Plan for Europe. Together with Jonathan Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union, he will take part in a roundtable on how The City of London can contribute to the Investment Plan for Europe. They will also speak at a Tech City innovation event on Thursday morning.
In addition, Vice-President Katainen will meet Chief Secretary to the Treasury Greg Hands, Commercial Secretary to the Treasury Jim O'Neill and Secretary of State for Business, Innovation and Skills Sajid Javid. He will also discuss the Investment Plan with the House of Lords EU Committee and at an event at Chatham House. On Friday, Vice-President Katainen will travel to Leicester to receive an honorary degree from his former Erasmus university as well as visit the university's EIB-Barclays funded Medical School facilities and their space technology exhibition, followed by a visit to the National Space Centre for a discussion with local SMEs.
Vice-President Katainen said: “Whether it is with government ministers in Whitehall or SMEs in Leicester, I look forward to discussing how British companies and investors can benefit from the European Fund for Strategic Investments (EFSI). I believe the UK can play a leading role in the success of the Investment Plan for Europe; and just earlier today the European Investment Fund signed an agreement with backing from the EFSI to lend £100 million to small, innovative companies in the UK over the next two years, so money is already starting to flow and I am sure much more will come shortly.”
Commissioner Hill said: "Europe needs investment: for SMEs, for infrastructure, for growth. It also needs the environment where investment can happen, with the financial sector playing a crucial role. This is what I hope to achieve through the Capital Markets Union – and today I am also announcing a review of the capital requirements the EU makes on banks, including how they affect funding for SMEs and infrastructure."
The Commission is starting an assessment of how the rules on capital requirements for banks (Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRDIV)) are working in practice. The consultation, launched today, will help establish whether the requirements put into place in the wake of the financial crisis may have unintentionally affected the ability of banks to lend to the European economy, for instance to small businesses and infrastructure projects (see IP/15/5347).
The UK is one of the strongest performing economies in the EU, with GDP growth of 3.0% and a comparatively low unemployment rate of 6.1% in 2014. While growth has been somewhat unbalanced, forecasts shows GDP growth should remain solid at 2.4% in 2015 and 2.6% in 2016. The unemployment rate is expected to decrease to 5.4 % in 2015 and 5.3% in 2016.
The level of investment in the UK fell sharply during the economic crisis but has picked up in recent years, increasing by 8.6% in 2014, and is expected to further increase by 5.6% in 2015. Strong business investment has been driven by corporate balance sheets, healthy profits, low borrowing costs, buoyant demand and an increasingly resilient financial sector; but public investment, especially in infrastructure, remains low compared to other EU Member States. The UK has recently set out an ambitious long term plan to boost infrastructure investment, especially in the energy, transport and communications sectors.
The Investment Plan for Europe has an important role to play in helping the UK to increase private and public investment in strategic infrastructure. It will also contribute to facilitating access to financing for SMEs in the UK and provide new opportunities for investors.
The Investment Plan for Europe has three objectives: removing obstacles to investment by deepening the single market, providing visibility and technical assistance to investment projects and making smarter use of new and existing financial resources. According to European Commission estimates, the Investment Plan has the potential to add €330 to €410 billion to the EU's GDP and create 1 to 1.3 million new jobs in the coming three years. It aims to address the current situation where the EU has sufficient liquidity, but private investors are not investing at the levels needed. For more information, see this factsheet.
On 28 May, just four and a half months after the Commission adopted the legislative proposal on 13 January, EU legislators reached a political agreement on the Regulation for European Fund for Strategic Investments (EFSI). Member States unanimously endorsed it on 10 March and Members of the European Parliament voted on 20 April. Finance Ministers welcomed the agreement on the Regulation at the ECOFIN Council on 19 June, and the European Parliament voted in favour of the Regulation in their plenary session on 24 June, allowing the EFSI to be operational by September as planned.
In line with the European Council conclusions of December 2014, which invited the European Investment Bank (EIB) Group to "start activities by using its own funds as of January 2015", the EIB has already announced several projects to be pre-financed in the context of the Investment Plan for Europe, in which it is the Commission's strategic partner.
Next stops on the roadshow:
4 September: Malta
17 September: Slovenia
18 September: Lithuania - the 28th and final EU Member State of the Investment Plan roadshow.
Vice-President Katainen will also make visits to non-EU countries to promote the Investment Plan for Europe later in the year, starting with China on 28 September.
More information about the Investment Plan for Europe:
More information about Capital Markets Union:
More information about the capital requirements for banks: