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THE FINANCIAL SYSTEM OF THE EUROPEAN UNION
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Commission, after a serious abdication of duty in
2010, at the outbreak of the Greek public debt
crisis, and making clamorous mistakes such as
raising interest rates in the middle of the interna-
tional financial crisis in the summer of 2008.
As of the summer of 2012, the ECB made it
clear that it would not allow further speculative
attacks on the euro, showing full readiness to
buy sovereign debt in the secondary markets. It
also continued its policy of lowering the official
cost of borrowing to a hitherto unheard-of 0.05
percent. The announcement had the desired ef-
fect, which meant that as of August that year
the financial volatility in the euro zone ceased. It
is important to draw attention to the fact that
the ECB took the measure without overstepping
its remit, as the bank’s statutes give it the man-
date of contributing to financial stability.
In view of the fact that the euro zone closed
2014 in a deflationary situation, on 22 January
2015 the ECB announced a public and private
debt purchasing programme to a value of 1.3
billion euros until September 2016, at least. In
this case, the ECB did not act to maintain finan-
cial stability, but to try to raise the rate of infla-
tion in the euro zone, which currently stands
well below the unofficial goal of being under
but near 2 percent.
The role of the EIB and the European Fund
for Strategic Investments
Since the outbreak of the crisis, the EIB has been
considered an ideal lever to offset the drop in
private investment and kick-start growth and in-
vestment. However, even when it has increased
the volume of credit over the last few years, in-
cluding credit lines to SMEs, it is not clear that it
has made a decisive contribution to increasing
productive and job-creating investments.
The European Council of June 2012 an-
nounced a capital increase at the EIB to the tune
of 10 billion euros, thus giving the impression
that its limited impact could have been down to
insufficient capital.
Yet when European Commission President-
elect Jean-Claude Juncker put forward a
European plan of public and private investment
in July 2014, the EIB did not complete further
increases in capital, since the impression is rath-
er what is needed is funding for projects whose
risk the Luxembourg-based lender cannot take
on if it wants to keep its maximum credit rating
(which, in any case, some observers dispute is
necessary for fulfilling its mandate).
In any case, the Commission has proposed
creating the so-called European Fund for
Strategic Investments (EFSI), whose purpose is
precisely to fund those projects that would not
normally receive the EIB’s support.
The EFSI will have 21 billion euros of public
seed capital. A total of 5 billion euros are pro-
vided by the EIB, while 16 billion have to be pro-
vided by the European Commission from the
community budget in the shape of guarantees,
backed by 8 billion that are set to come from
the Connecting Europe Facility (3.3 billion),
Horizon 2020 (2.7 billion), and the budget mar-
gin (2 billion).
With the 21 billion euros the EFSI would gen-
erate long-term investment to the value of 240
billion and 75 billion for SMEs from 1 June 2015
to 2017, which would be raised in the financial
markets and from private investors. The leverage
ratio, then, is 15 to 1. To be precise, the 21 bil-
lion becomes 63 billion in loans, which has to be
accompanied by private investment equal to 252
billion euros (which gives the 315 billion).
As mentioned, the EFSI investments will be
riskier than those that the EIB group normally
finances, though they will be channelled