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17 Amendments of Hans-Olaf HENKEL related to 2016/2064(INI)

Amendment 1 #
Draft opinion
Paragraph 1
1. Notes that, having been fully operational for less than a year, the European Fund for Strategic Investments (EFSI) has kicked off successfully, delivering some initial concrete results and acting as a positive instrument to overcome the lack of investment in Europe through coordinated action; stresses, however, that the pace needs to be accelerated and its initial results need to improve significantly in the near future in order for the instrument to achieve its objectives fully;deleted
2016/09/07
Committee: IMCO
Amendment 9 #
Draft opinion
Paragraph 1 a (new)
1a. Strongly supports the ambition of the Commission to overcome the investment gap and strengthen the incentives in the private sector to invest in and boost the sustainable growth of the European economies; for this reason, however, firmly opposes the activities of the EFSI that undermine these goals and are not a solution but rather part of the problem;1a __________________ 1a As of July 2016, the EFSI approvals ensured 37% of its original goal of €315 billion in the new investments (289 approved transactions in total). Some say the existence of these investments is a success of its own, as they would not have existed without the fund. This statement is a mistake that indicates lack of economic understanding.
2016/09/07
Committee: IMCO
Amendment 10 #
Draft opinion
Paragraph 1 b (new)
1b. Calls for activities that deal with the real causes of the private investment gap which have not yet been addressed - debt crisis, one trillion EUR in bad loans in the banking sector (ECB estimate) which weakens its ability to provide new loans to the economy1b , bureaucratic, regulatory and tax burden; considers that EFSI is not and cannot be a solution to this problem; __________________ 1b The balance sheets of the banks in the Eurozone exhibit €1,000 billion of failed loans (for the reference, the whole budget of the Union is approximately €150 billion). Given that a standard bank is able to use its own capital to cover only a few per cent drop in the value of its assets, the question is who will pay the losses should they need to be addressed. The European Banks are sufficiently large (some are larger than the GDP of the country in which they reside), which in turn may increase taxpayers‘ expenditure should they find themselves in trouble. As the banks realise that they have lent money to dubious projects, they are not willing to offer further loans any more. However, the businesses in the EU are usually given up to 90% of the resources by the commercial banks (for the reference, in the USA, it is only 30%). Due to the fact that banks are reluctant to offer loans, the Commission has come up with the EFSI project, which is to substitute the loans-offering role of the banks. Instead of having the banks recovered by addressing their losses (which would indeed hurt, but if it had been performed at the beginning of the Euro crisis, we could already have growth with a healthy banking sector), the ECB is feeding them with money. Not only that, it has also decreased the interest rates to virtually zero, in order to make them take on more loans. This is, however, not happening (the only argument of the proponents of quantitative easing is that the situation would otherwise be even worse). Furthermore, the EFSI is not properly functioning either. The problem is that we keep trying to solve the consequence instead of addressing the cause of the malfunctioning system of loans.
2016/09/07
Committee: IMCO
Amendment 11 #
Draft opinion
Paragraph 1 c (new)
1c. Reminds that in principle, there are little differences between the EFSI and standard European funds; believes that the main difference is in the extent of support - while standard European funds finance most of the costs of the supported projects, the EFSI provides a loan for the part of the project; thus, EFSI can support more projects for less taxpayers' money but only in the cost of dead-weight loss, shifting of resources and moral hazard;
2016/09/07
Committee: IMCO
Amendment 12 #
Draft opinion
Paragraph 1 d (new)
1d. Acknowledges the dead-weight loss; reminds that EFSI supported financing of Normandy Dairy Production Facility and Polish milk powder factory while there is a general excess capacity in the diary production; reminds also that the same applies for the EFSI support of the wind farms while there are excess capacities for the electricity production in Europe; believes that EFSI must stop financing ordinary projects which deforms standard market competition; 1c __________________ 1cThe EIB declares that the EFSI “remains focused on the specific objective of addressing the market failure in risk- taking, which hinders the investment in Europe. In doing so, the EFSI will also increase the volume of high risk projects supported by the EIB Group.” The EFSI also finances a Slovak PPP project; a construction of approximately 27 km of the D4 motorway around Bratislava, which is to connect to the R7 expressway (outside the scope of EIB financing). Paradoxically, while the contribution to the transport capacity of the D4 remains controversial, the more necessary R7 will not receive an EFSI funding. Moreover, there is no reason to assume this D4 PPP project would not find sufficient funding without a help from the EFSI.
2016/09/07
Committee: IMCO
Amendment 13 #
Draft opinion
Paragraph 2
2. Urges that EFSI ensure greater additionality for its projects in relation to normal EIB activities; underlines the fact that EFSI should support strategic investments related to projects that cannot obtain funding because of market failures, suboptimal investment situations or high levels of risk; recalls, furthermore, that when determining the criteria for use of the EU guarantee, EFSI should consider not only the profitability factor, but also the positive effects in terms of growth, job creation and cohesion;deleted
2016/09/07
Committee: IMCO
Amendment 20 #
Draft opinion
Paragraph 3
3. Stresses that, while the SMEs window of the EFSI represented a good opportunity for start-ups, SMEs and mid- caps, there is a lack of big investment; emphasises, therefore, the need to improve the financing of infrastructure and innovation projects;deleted
2016/09/07
Committee: IMCO
Amendment 32 #
Draft opinion
Paragraph 3 a (new)
3a. Urges that moral hazard shall not be overlooked; stresses that even partial loses of the investments supported by EFSI can cause 100% loss of the European taxpayers money due to high level of leverage the EFSI uses; stresses also that taxpayers unwillingly bear the risks of the failed investments;
2016/09/07
Committee: IMCO
Amendment 34 #
Draft opinion
Paragraph 4
4. Calls for better coordination between EFSI and other EU funds, in particular the European Structural and Investment Funds (ESIFs), so as to promote stronger cohesion in Europe and ensure that EFSI has wide geographical coverage; calls, also, for closer cooperation with national promotional banks, local and regional authorities and relevant stakeholders, including further encouragement to establish investment platforms to aggregate sectorial and geographical investment opportunities;deleted
2016/09/07
Committee: IMCO
Amendment 40 #
Draft opinion
Paragraph 4 a (new)
4a. Stresses that profitability of projects cannot be counted simply by looking at the cash flows; stresses that, in addition to adjustments for lost income from alternative use of the resources (e.g. what would happen if the resources were never taken from the hands of the taxpayers), the investment risk calculation must be considered as well; believes that, since risk is what seems to be one the main reasons for the lack of private investments in the EU, its inclusion can throw many EFSI projects into red numbers;4a __________________ 4a The profitability of the investments approved by the EFSI should not be compared to the situation where no other investments are made by the private sector. Instead, the profitability of the EFSI should be compared to an alternative scenario in which the public sector eliminates the investment uncertainty it created and which caused the investment gap in the first place: deficit public spending; failure of the regulatory role of the banking system; and bureaucratic, regulatory and tax burden it forced on private investors. These are the key issues that have not yet been addressed.
2016/09/07
Committee: IMCO
Amendment 41 #
Draft opinion
Paragraph 5
5. Underlines the need to increase the transparency of EFSI operations and to improve information about projects and their quality to citizens and potential beneficiaries; points to the need to enhance the European Investment Project Portal (EIPP) and the European Investment Advisory Hub (EIAH) in order to establish a link with the real economy, give visibility to projects and provide high- quality technical assistance to potential promoters;deleted
2016/09/07
Committee: IMCO
Amendment 45 #
Draft opinion
Paragraph 5 a (new)
5a. Acknowledges that the most important effect of EFSI activities is shifting of resources as every euro the EFSI lends for the investments it supports is a euro that was taken from the hands of a private lender; stresses that, if a private entrepreneur makes an investment that EFSI is willing to support, he will not realize an investment that he could otherwise accomplish without the help from EFSI;5a __________________ 5aEvery investment inevitably carries a level of risk and therefore investing is a natural role for the private sector. When people invest their own capital, they carefully consider potential profits and losses of their investments as well as the credibility of the borrower. Risks (and thus both profits and losses) stay in private hands. If the EFSI applies high standards set by professional investors from the private sector, there will be no reason for its existence, as its role will already be fulfilled by the private sector. The very existence of the EFSI is therefore problematic: the EFSI uses public resources to incite investments that are too risky for private lenders to take, while the private sector and taxpayers bear the risks of failing EFSI investments.
2016/09/07
Committee: IMCO
Amendment 47 #
Draft opinion
Paragraph 6
6. Considers that EFSI is instrumental in completing and restructuring the Single Market; underlines, in this light, the importance of strengthening the third pillar of the ‘Investment Plan for Europe’, also in the context of the European Semester process, in order to make the EU regulatory environment more certain, homogeneous and favourable to investments by focusing especially on strategic objectives such as completion of the Single Market and the development of a well-functioning Digital Single Market, and on key actions that support these objectives;deleted
2016/09/07
Committee: IMCO
Amendment 52 #
Draft opinion
Paragraph 6 a (new)
6a. Underlines that the EFSI shifts the capital from the market-driven projects where they would be most effective to the projects driven by the EFSI bureaucrats where they are less effective; underlines that economy as a whole therefore loses;6a __________________ 6aThe EFSI is an entity that does not solve the causes of the investment gap, but rather shifts the risks that private lenders are not willing to take to all European taxpayers. The resources of the Public sector are solely those it has obtained in taxes from the Private sector. Every public euro used for the activities of the EFSI is therefore missed in the private sector, which makes the situation for the future of private investments even worse.
2016/09/07
Committee: IMCO
Amendment 53 #
Draft opinion
Paragraph 6 b (new)
6b. Acknowledges that EFSI enables avoiding fiscal rules; stresses that national contributions to EFSI are considered one-off measures, respectively a "relevant factor" in terms of assessing the deficit; as a result, stresses that several countries struggling with fiscal problems including the ones with public debt exceeding 60% GDP cap rule or 3% GDP deficit rule pledged billions of euros in contributions on EFSI projects;
2016/09/07
Committee: IMCO
Amendment 57 #
Draft opinion
Paragraph 7
7. Welcomes the recent Commission proposal to extend EFSI beyond 2018 and to reinforce it in order to overcome the current investment gap in Europe and continue to mobilise private sector capital, these being crucial steps to ensure sustainable growth, competitiveness, quality job creation and social and territorial cohesion in Europe.deleted
2016/09/07
Committee: IMCO
Amendment 63 #
Draft opinion
Paragraph 7 a (new)
7a. Recommends to reject the Commission proposal to extend the EFSI beyond 2018 and to stop providing any further loans from the EFSI.
2016/09/07
Committee: IMCO