Los Angeles, CA – Responding to an increasingly sluggish regional economy, the European Union will create a strategic investment fund that could generate up to $386 billion in private- and public-sector money to upgrade infrastructure, jumpstart the EU’s sluggish economies and ignite job growth.
“The EU must stimulate and modernize its economy, or risk falling farther behind global competitors like the U.S. and China,” said European Parliament President Martin Schulz.
The plan, approved by leaders of the 28-nation EU at their one-day summit meeting in Brussels earlier this week, calls for use of EU seed money to leverage up to 15 times more in private funds for the new European Fund for Strategic Investments with plans to have it in operation and approving new investment projects by mid-2015.
German Chancellor Angela Merkel said investments fostered by the strategic fund “must go into projects for the future, particularly, for example, in the digital economy or where we aren’t so good on the world market as we should be.”
Investment in areas like schools, universities, green energy and infrastructure is key “if we want Europe to be an economic champion in the future,” she said.
The plan is not without its critics, however, with some EU leaders warning that despite its multi-billion dollar price tag, the proposed investment fund “may not be big enough” to win over wary investors.
“This package looks like creative accounting for the moment,” said Lithuanian President Dalia Grybauskaite, who helped draft a summit communiqué noting that the strategic fund will accept contributions from EU member states. For the fund to launch, it would also require approval by European legislators.