Europe announces stimulus fund

The European Commission has announced a round of stimulus spending, aimed at improving the EU’s stock of infrastructure and lifting the 27 country bloc out of its current recession. However, with tight budgets in place and almost a € 1 trillion committed to bail-out funds and stability mechanisms, the Commission said all it could spare for infrastructure was € 50.75.

The new initiative, the European Infrastructure Fund (EIF), will be targeted at, “Urgent infrastructure schemes, which can provide a tangible economic benefit.” It will be administered by a joint committee of some 100 officials from the Commission’s DG Enterprise and DG Transport directorates. The first stage of implementation will be a region-wide study to identify suitable projects, which is expected to take three to five years.

A spokesman for EIF said, “This is an incredibly speedy turnaround in European terms. Once we have identified suitable projects, the long list will be whittled-down to a short list, which will then be debated by the European Parliament and Council of Ministers. I think it is feasible that this investment could be implemented within a decade, bringing a significant economic boost to Europe.”

European Commission president, José Manuel Baroso added, “The size of this financial commitment tells you everything you need to know about our dedication to creating a dynamic European economy, free from bureaucracy and over-regulation. It also highlights the priority we put on investing in the region’s infrastructure as well as job creation.”

Countries are already putting in strong bids for the funds. A spokesman for the Italian Ministry of Public Works said, “There is an enormous pothole in the Via Mentana near the central station in Padua. The € 50 that’s on offer from the Commission could go a long way to getting it repaired, although the city would have to find some money itself too.”

There is also interest elsewhere in the EU. A statement from the UK’s Department for Education said, “We applaud the Commission’s EIF. We have a primary school in Bolton where someone has stolen the lead from the roof, and we hope to secure a significant portion of these funds to stop water leaking in onto the computers.”

However, the initiative has received universal praise, a statement from the European Construction Alliance (ECA) said, “European construction output is about € 1.3 trillion per year, so this stimulus fund represents a boost of about 0.000000004% to the industry. In terms of job creation, it might amount to a morning’s work for one construction operative. ECA also questions the impact it will have on the current economic downturn, given that the funds are unlikely to be spent before 2023. We would encourage the Commission to think again.”

Additional information on EIF is available here.