Activities of Bernd KÖLMEL related to 2016/2064(INI)
Shadow reports (1)
REPORT on the implementation of the European Fund for Strategic Investments PDF (647 KB) DOC (149 KB)
Amendments (32)
Amendment 1 #
Draft opinion
Paragraph 1
Paragraph 1
Amendment 9 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Takes note of the large investment gap in Europe, which the Commission estimates at a minimum of EUR 200-300 billion a year; , highlights in particular, against this backdrop, the market needs in Europe for high-risk financing, for instance in the fields of R&D, energy and ICT; is concerned by the fact that the most recent data on national accounts do not indicate any surge in investment since the European Fund for Strategic Investments (EFSI) was launched, leading to risks of continued subdued growth and continuing high, although generally falling, unemployment rates; stresses that closing this investment gap is key to reviving growth, fighting unemployment and attaining long-term EU policy objectives; further stresses that the macroeconomic data on growth and investment levels in the EU-28 and EU-17 countries should be assessed by taking into account ongoing disparities between the various EU’s countries and regions;
Amendment 9 #
Draft opinion
Paragraph 1 a (new)
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.
Amendment 10 #
Draft opinion
Paragraph 1 b (new)
Paragraph 1 b (new)
Amendment 11 #
Draft opinion
Paragraph 1 c (new)
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;
Amendment 12 #
Draft opinion
Paragraph 1 d (new)
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.
Amendment 13 #
Draft opinion
Paragraph 2
Paragraph 2
Amendment 20 #
Draft opinion
Paragraph 3
Paragraph 3
Amendment 28 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Emphasises that EFSI was launched to help mobilising, resolve difficulties and remove obstacles to financing as well as to implement strategic, transformative and productive investments that provide a high level of added value to the economy, the environment and society and to encourage private investment in all regions of the EU;
Amendment 32 #
Draft opinion
Paragraph 3 a (new)
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;
Amendment 34 #
Draft opinion
Paragraph 4
Paragraph 4
Amendment 40 #
Draft opinion
Paragraph 4 a (new)
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.
Amendment 41 #
Draft opinion
Paragraph 5
Paragraph 5
Amendment 43 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Recalls the role of Parliament as foreseen in the regulation, in particular in relation to the monitoring of EFSI implementation; acknowledges, however, that even though it is too early to finalise a comprehensive assessment of the functioning of EFSI and its impact on the EU economy, the general direction and trends of the Fund are becoming increasingly clear; but is of the opinion that a preliminary evaluation is crucial in order to identify possible areas of improvement for EFSI 2.0 and thereafter;
Amendment 45 #
Draft opinion
Paragraph 5 a (new)
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.
Amendment 47 #
Draft opinion
Paragraph 6
Paragraph 6
Amendment 52 #
Draft opinion
Paragraph 6 a (new)
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.
Amendment 53 #
Draft opinion
Paragraph 6 b (new)
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;
Amendment 57 #
Draft opinion
Paragraph 7
Paragraph 7
Amendment 63 #
Draft opinion
Paragraph 7 a (new)
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.
Amendment 71 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Notes that, while all projects approved under EFSI are presented as ‘special activities’, an independent evaluation has found that some projects could have been financed otherwise; further notes that as every EFSI project is first approved by the EIB board and subject to the Bank’s standard due diligence process, the EIB needs to demonstrate that EFSI projects – past and future – would not have benefitted from EIB funding if EFSI guarantee was not available;
Amendment 84 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Stresses that the assessment criteria for the fulfilment of the additionality are unclear, and therefore the figures given about the amount of ‘additional private investment’ should be considered an estimate;
Amendment 103 #
Motion for a resolution
Paragraph 8 a (new)
Paragraph 8 a (new)
8a. Believes that the fulfilment of the additionality criteria is dependent upon region specific economic conditions, as a project may be additional in one region but not in another; asks the EIB, where appropriate in cooperation with the EIF, to include an evaluation of the degree of additionality obtained at the level of each Member State in its annual report to the European Parliament and the Council;
Amendment 174 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Notes with concern that small projects are deterred from applying for EFSI financing based on their size; points to the significant impact that a small project might nevertheless have on a national or regional scale which has resulted in a low success rate of the EU’s geographically small countries with below-average GDP per capita; believes that EFSI should seek to encourage private investment in all regions of the EU; points to the significant impact that a small project might nevertheless have on a national or regional scale, especially since often the smaller-scale projects in these Member States are relatively large when measured as percent of GDP; believes that the European Investment Advisory Hub (EIAH) is instrumental in advising and accompanying promoters of small-scale projects in the structuring and bundling of projects via investment platforms or framework agreements; calls on the Steering Board to look into this issue and put forward proposals to correct this situation;
Amendment 211 #
Motion for a resolution
Paragraph 17 a (new)
Paragraph 17 a (new)
17a. Notes that on 30 June 2016, 63.4% of the IIW portfolio is concentrated in just three countries – Italy, Spain and the UK – thus exceeding the geographical concentration level of 45%; further notes that 54% of the SMEW portfolio is concentrated in three EU-15 countries: Italy, France and Germany;
Amendment 230 #
Motion for a resolution
Paragraph 20
Paragraph 20
20. Recalls that the IC experts are responsible for EFSI project selection, granting the EU guarantee and for approving operations with investment platforms and National Promotional Banks (NPBs) or institutions; recalls further that they are independent; considers that project selection is not transparent enough and that decisions have to be accounted for; stresses that the EIB should make improvements to the disclosure of information about the projects it approves under EFSI, with a proper justification of additionality and the scoreboard as well as the projects’ contribution in achieving the EFSI objectives; is concerned about documented conflicts of interest on the part of IC members;
Amendment 272 #
Motion for a resolution
Paragraph 28
Paragraph 28
28. Welcomes that by the end of 2016, all 28 countries received EFSI funding; underlines, however, that as of 30 June 2016, EU-15 had received 91% whereas EU-13 had only received 9% of EFSI support; regrets that EFSI support has mainly benefitted a limited number of countries; acknowledges however that the distribution of the total EFSI-related investment appears much less concentrated, once either the size of the economy or the population is accounted for;
Amendment 293 #
Motion for a resolution
Paragraph 29
Paragraph 29
29. Acknowledges that GDP and the number of projects approved are linked; recognises that larger Member States are able to take advantage of more developed capital markets and are therefore more likely to benefit from a market-driven instrument such as EFSI; underlines that lower EFSI support in EU- 13 may partly be attributable to other factors, such as the small size of projects, and competition from the European Structural and Investment Funds (ESIF); observes with concern, however, the disproportionate benefit to certain countries and underlines the need to diversify geographical distribution further, especially in crucial sectors such as modernising and improving the productivity and sustainability of economies;
Amendment 322 #
Motion for a resolution
Paragraph 42
Paragraph 42
42. Recalls that the EU Guarantee Fund is predominantly funded from the EU budget, the bulk of which was taken by cutting the budget of Horizon 2020 and the Connecting Europe Facility programmes; notes the trend whereby the EU money is taken from the existing programmes in favour of financing public-private partnership (PPP) investment programmes; takes account of all relevant evaluations suggesting that the current provisioning rate of the Guarantee Fund of 50% appears to be cautious and prudent in terms of covering potential losses and that the Union budget would already be shielded by an adjusted target rate of 35%; intends to examine whether proposals for a lower target rate would have repercussions on the quality and nature of the projects selected; stresses that, so far, there have been no calls as a result of defaults of EIB or EIF operations;
Amendment 369 #
Motion for a resolution
Paragraph 48 a (new)
Paragraph 48 a (new)
48a. Calls for the communication about EFSI to be clearer; in particular about the fact that EFSI provides a guarantee and that the EIB support is a loan, not a grant; notes with concern that some project promoters, whether by mistake or design, position the EIB and EFSI support as absorption of the EU funds which could result in negative consequences, especially where the taxpayers’ money is used to co-finance the relevant projects;
Amendment 370 #
Motion for a resolution
Paragraph 48 b (new)
Paragraph 48 b (new)
48b. Notes that there is little publicly disclosed information available on the approved projects; calls on the EIB to offer more detailed information about the approved projects by, among other means, publishing it on the Bank’s website so as to insure the general public is more informed;
Amendment 390 #
Motion for a resolution
Paragraph 49 a (new)
Paragraph 49 a (new)
49a. Stresses that the existing EU programmes are still the main contributors towards the Union’s economic, social and territorial cohesion;