An opportunity with constraints

To get an agreement on the Juncker investment package, avoid vague concepts, new rules and new forms of investment, writes the Czech Republic’s secretary of state for EU affairs.

Six years after the onset of the global recession and Europe’s financial and debt crises, the European Union is slowly getting back on track. The principal element in renewing growth is investment activity. The intention set out by the president of the European Commission, Jean-Claude Juncker, to create an investment package that would generate over €300 billion to boost investment activity in the EU in the coming three years therefore comes at the right moment. Now that the Commission has published the main elements of its investment plan, it is time to strengthen the debate on the final shape of the proposal so that the package is truly effective and bears fruit in all member states.

The Czech Republic fully supports the thematic priorities to be supported by the investment package, such as transport, energy union and the digital economy. These are in line with Czech investment preferences, a view no doubt shared in many EU national capitals. So far so good as regards ownership of the package – which will be essential if we want to make it a success.

The issue of ownership, though, also brings into play more intricate considerations relating to the structure, financing and context of the package. With investment resources still scarce in many member states, we need to prevent competition between different EU investment tools and funds. We should strive for synergies, complementarity and multiplier effects. This is why the Czech Republic considers Juncker’s initiative to be an excellent opportunity to add necessary patches to the EU’s existing investment instruments so that full use is made of them.

The Czech Republic is particularly anxious to ensure that the package does not in any way overshadow the EU’s Cohesion Policy and the European Structural and Investment Funds in general. If the investment package remains flexible enough to complement existing tools, we will be on the right track. If the investment plan starts to compete with or secure more resources than the European Structural and Investment Funds, we risk damaging not only ownership and credibility; there is a real danger that this would make investments less feasible in less-affluent member states or the states that receive cohesion funding. That would in turn increase regional and social disparities – contrary to the spirit upon which the EU is built.

If the Juncker package is complementary to the European Structural and Investment Funds, the cohesion member states would gain a new opportunity. Both tools need to be used to the full, which also means that no funds in the 2007-13 programming period are lost or left behind.

As a country that is committed both to an effective cohesion policy and to adherence to fiscal rules, the Czech Republic cannot afford to increase significantly national co-financing of funds already agreed upon. It would also be extremely difficult for us to re-direct or re-shape the instruments that we use and are about to use in the 2014-20 programming period or for us to slow down the current process of agreeing operational programmes. We therefore expect the package to leave enough room for flexibility and – as discussed within the investment task-force – to remove barriers to investment, including administrative and legislative obstacles that prevent us from using all investment resources effectively. This also concerns thematic issues – we should make sure that funds lead to tangible results that correspond to the real needs of each member state.

Success will depend chiefly on how the package streamlines public and private investment. We welcome the incentives for member states to contribute to the overall capacity and effect of the package – and the decision that contributions should remain voluntary. The package needs to maintain this flexibility; it should not turn into a rigid machine. We also welcome the clear statement that the package should in no way compromise existing rules, and we are glad that the package will not create double standards in the application of EU fiscal rules.

Finally, we are eager to discuss governance of the package. As well as being effective, fair and transparent, governance of the package should create a sense of ownership and build on existing structures and formats as much as possible.

The easiest way to get to the finish line at December’s European Council is not to waste time and energy on vague concepts, on creating new rules or new forms of investment. Introducing substantial changes to the current legislative framework would make the process lengthy and complex – which would, in turn, produce instability and unpredictability. We should focus instead on the tools and instruments that we have to hand, and on making full and effective use of them. We should build on experience gained from tools that have proven useful. And we should leave space for flexibility and for simple application of existing rules, so that no investment source goes to waste.

The article of the State Secretary for European Affairs Tomáš Prouza was published in on-line European Voice on 10. 12. 2014