Dear Prime Minister Renzi, 

 

The European Council meeting on 18 and 19 December 2014 represents the perfect occasion for Member States to endorse and give consistency to the Investment Plan of the European Commission and the European Investment Bank.

 

Stimulating investments is the best way to bring growth back in Europe. For too long, public services’ providers and employers have faced fiscal consolidation processes. Sectors such as education, healthcare, public administration, transport or environment protection, have hardly been hit.

In this context of fiscal consolidation, Member States have attempted to rationalise public expenses by, among others, cutting public investment. Those cuts have been particularly damaging to Europe’s long term growth potential. 

 

A change of paradigm is needed. Public and private investments are complements, and not substitutes. An increase in public investment could boost, and not crowd out, private investment. This is the case for public investment in infrastructure or networks as it improves the efficiency and allocation of private investment for specific firms, sectors, or projects. In that regard, the Investment Plan goes in the right direction.

 

However, the initiative launched by the European Commission and the EIB will only have concrete results if each Member State commits to contributing to the EFSI. Indeed, private investment can only flourish if it is based on sound public finances and on re-launched public investments in social and physical infrastructures.

Without concrete commitments from Member States, the Investement Plan will never reach its ambitious leverage effect of 1:15 and will only remain a €21bn guarantee that the EC and EIB were able to put together.

 

For all those reasons we particularly call on you to achieve that clear commitment from all Head of States and Governments and to firmly inscribe it in the Council Conclusions. A clear commitment would indeed provide the key ingredient to re-instate a positive investment climate in Europe: trust. Indeed economic growth is not only a money issue. Above all growth to come back in Europe needs trust from investors, from enterprises and from citizens in a positive future. We count on you to bring it back.

 

 

The letter is available on the following page, in PDF: http://www.ceep.eu/wp-content/uploads/2014/12/CEEP-14-115-Letter-to-the-...

  

 

For further information, please contact:

Maxime STAELENS, Communications Officer

Email: maxime.staelens@ceep.eu

Tel.: + 32(0) 2 229 21 40