Last Updated 22 | 01 | 2014 at 18:39

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Europe’s missing investment to cost €540bn in lost return - Prof. Scicluna

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Malta’s Finance Minister Prof. Edward Scicluna underlined the importance of financial instruments within the European Union that are able to devise specific and tailored interventions to ease financing and promote investment within recovering a European Union.

“According to one estimate, Europe’s missing investment between 2008 and 2012, will cost the continent €540 billion in lost returns by 2020,” Prof. Scicluna said, underlining the effect of the financial crisis had on European investment.

Prof. Scicluna was speaking during a plenary session of the European Parliamentary Week in Brussels. The subject of his address is the promotion of growth and jobs in Europe through the financing of the real economy. He was invited by the President of the European Parliament Martin Schultz, in his capacity as Chairman of the Board of Governors of the European Investments Bank (EIB).

Speaking about the role of the EIB within a European Union that is still recovering from a financial crisis, Prof. Scicluna said that with the help of the EIB the EU would be able to remove obstacles to the reallocation of resources – not only for the most crisis-hit countries, but also across Europe.

He also noted that the crisis had a particularly intense effect on small and medium-sized enterprises (SMEs) in particular within those countries that were most affected by the crisis.

He explained that the EIB group works to ease financial bottlenecks in different ways, such as targeted lending through financial intermediaries is used as a way to pass on funding advantages of the EIB. At the same time, the EIB’s subsidiary, the European Investment Fund, has signed guarantees for another €2 billion.

“The European Investment Fund (EIF) had pilot tested the JEREMIE guarantee instrument in Malta with excellent results, so much so that the new Maltese Government, through to the EIF, issued a second expression of interest for a JEREMIE guarantee extension in August 2013 to assist a further 100 SMEs in the coming months.”

He remarked that a flexible approach will be needed, and expressed confidence that the EIB will support its Membership through increased financial capacity, increased risk bearing capacity, increased result and strategy orientation of EIB operations, and the sector and banking experience of the bank’s staff.

“The EIB's role will continue to promote convergence by offering attracting rates to Member States that currently face high financing costs,” Prof. Scicluna said.

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