MEP complains EU’s billion-euro plan leaving out countries like Malta

Former Prime Minister Alfred Sant has complained in the European Parliament that the Juncker Plan, a €315 billion investment plan, was not featuring any member states from the south and the peripheries of the European Union.

The European Fund for Strategic Investments (EFSI) has so far released €11.2 billion in cash for a multiplier of €82 billion in investments, or 26% of the total €315 billion targeted by the European Commission.

Over 220 transactions in 25 out of 28 member states have been carried out, but Malta, Cyprus and Bulgaria are not among those recipients. Malta was hoping that it could convince the EU to finance a 79-km monorail when the plan was launched, with plans expected to be completed by June 2015.

MORE Monorail on backburner as Malta remains without EIB financing

But Malta remains one of the few member states for which no cash from the ‘Juncker Investment Plan’ has yet been earmarked.

Sant, a Labour MEP, said the plan was accentuating the structural divergences that already exist between the economies of southern Europe and those of central Europe.

“There is too great a concentration of projects in the bigger economies of the Single Market, with southern and other peripheral small economies practically not featuring at all. One could claim that the European Fund for Strategic Investment (EFSI) is providing an example of how under EU initiatives, a transfer of resources from the periphery to the centre is occurring, further emphasizing structural divergences.”

Sant was addressing the European Parliament during the mid-term review debate on the investment plan.

MEPs voice sharply divided verdicts on the progress of the €315 billion EFSI one year on since its launch in a debate with EU Commission Vice-President Jyrki Katainen.

“I am among those who are very disappointed with the outcomes of EFSI’s first year. The Commission’s euphoria about the results cannot be reconciled with the reality. But I am unsurprised things have turned out this way. The financial fundamentals of EFSI, based on relatively insignificant ‘own’ funds, levered extensively through guarantees to surpass €300 billion with private capital, militate against a choice of projects considered by markets as having low-payoffs or too risky,” Sant said.

Most of the approved projects have been in large EU countries, namely in France, Germany, Italy, Spain and the UK. To date Malta has not benefitted from the Juncker Plan.

EFSI money is intended to fund projects that are both commercially feasible but could be high-risk or have a long gestation period – a market gap that prevents companies from finding immediate private financing.

Malta had proposed the monorail as the “ultimate solution” for urban mobility. The proposal included using rails and tunnels of the old train service from Valletta to Mdina which started in 1882 and was mothballed in 1931 when private car transport rendered the train service superfluous.