Kamall: More detail needed to ensure EU investment package unlocks private growth

26-Nov-2014 @ 14:15

Syed Kamall Syed Kamall

No items found. No items found.

President Juncker's €315bn EU Investment Package needs to unlock private investment, but it cannot be a substitute for economic reforms that will encourage more private investment into Europe's economy, Syed Kamall, leader of the European Conservatives and Reformists Group said this morning.

Speaking in the debate where President Juncker launched the initiative, Dr Kamall warned that many private investors are wary of investing in government projects, and said that projects must deliver real added value, without passing real risks onto European taxpayers.

"How do we avoid a situation where for private investors it's heads they win, tails taxpayers lose?" the London MEP asked.

Asking President Juncker for more detail on the initiative, he said the commission also needs to ask the broader questions about why companies are not investing in Europe, and particularly the eurozone at the moment.

Responding to President Juncker's analogy that the fund will act like a watering can for Europe's economy, he said:   

"I like your analogy of using the watering can. How do we make sure it is a watering can that stimulates growth? How do we make sure that it's not a government flood that washes away private investment? Or a private irrigation system that is never turned on?" 

He went on: "What we need are detailed answers to some of our questions. I've talked to a number of private investors, and asked them what stops them from investing. I was talking to a large institutional investor last week with over 600 billion Pounds of assets under management and they told me that quite often government projects are fanciful. They don't see any real return. How do we make sure that we have projects that are attractive to private investors?

"Venture capitalists tell me that they don't invest. That the Alternative Investment Fund Managers Directive and other EU legislation make the EU less attractive to invest. How do we tackle those issues?

"A former German industrialist was talking to me the other day and he said why is it that the non-eurozone is so much better at attracting investment than the eurozone. Is the euro the key to that question?

"But the key to the package is how do we unlock this investment? How do we make sure that we're not just talking about money and that we have the reforms that unlock these investments.

"Let me give you a couple of examples. A few years ago a British company wanted to invest in Brindisi in Italy. They spent over 11 years trying to invest in a LNG terminal. A huge infrastructure project. But they walked away after 11 years because of bureaucracy and frustration. How do we make sure that red tape like that doesn't stop investment in infrastructure?

"Or the other example of Castellon airport. Millions of Euros of public money, but forty-four months after being inaugurated it hasn't opened.

"So the questions we have to ask are, how do we unlock this private investment without taxpayers taking on the burden of risk? How do we avoid a situation where for private investors it's heads they win, tails taxpayers lose? And how do we avoid more Brindisi's or more Castellon's?

"Answer those questions Mr Juncker, give us real detail about these investments, tell us why the private sector is not investing at the moment, and maybe then we can support your project." 

« Back