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How novel are Juncker’s investment plan and the EFSI?

Tomorrow, on 24 June 2015, the European Parliament is expected to approve the legal details of Jean-Claude Juncker’s investment plan and the related European Fund for Strategic Investments (EFSI). This plan has been sold as a major innovation, but our research has shown that it is actually the continuation of existing EU policies, just at a larger scale. Does it still mean we are on the way towards political budget cycles in the EU?

Next week, we – Klaus H. Goetz (with whom I work here in Munich) and myself – are going to present a paper* titled “From Politicised Budgeting to Political Budgets in the EU” at the Milan International Conference on Public Policy.

At the centre of our attention is the Juncker investment plan and whether it is a sign that we are going to see more pronounced political budget cycles in the European Union in coming years. With the promise of achieving up to € 315 billion in new investments, more than double the amount of the EU’s annual budget, Juncker’s initiative definitely looked like something was in the air into that direction when we started working on our paper.

What we find (see Section V. of the paper) is that there are quite a number of ways to interpret what the Juncker plan means for the future – from a just a gradual move in the direction of multiple paths that have started years ago to a quite a radical post-electoral politicisation of EU budgeting.

More interestingly, we found that the leveraging model that was presented as Juncker’s ‘baby’ and innovation has not just been around for ten years but that it was actually already on the political agenda of Barroso five years ago, just a little less ambitious.

To see the striking similarity between Barroso’s and Juncker’s plan, see first this quote from the Juncker’s political agenda in 2014:

I do believe that we can make much better use of the common EU budget and of Union financial instruments such as the European Investment Bank (EIB). We must make use of these public funds available at Union level to stimulate private investment in the real economy.

Now, see the the second quote from Barroso’s political agenda in 2009:

We should work more closely and imaginatively with the European Investment Bank and the private sector. Within the existing instruments, we must further improve the blending between grants from the EU budget and EIB loans, in order to increase the overall leverage effect.

If you read our paper (in particular Section IV) you will understand more in detail how the Juncker plan has evolved over time from an unknown EU policy, and how it was  made something ‘big’ and ‘new’ by increasing scope but also by using quite some political communications to make it look novel and big. How to interpret this in the wider development of EU budgeting is part of a debate worth having.

I’d be happy to hear your thoughts on our paper and our findings. If you happen to be at ICPP in Milan next week, don’t hesitate to contact me in advance for a chat!

Update: See also yesterday’s background paper by the European Parliament Research Service on the EFSI.

*The paper is part of a research project on budgeting in international organisations as part of a larger Research Unit on International Public Administrations, financed by the DFG.


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