The ‘Junker Plan’ was created in 2014 to boost investment in the European economies and, for the time being, the results are pretty modest. There has been a lot of song and dance about extending the Plan to promote investments of up to 630 billion euros over the next six years. But the fact is that, up to now, projects worth 116 billion euros have been approved under the auspices of the Plan, according to the European Commission (EC)’s own estimates.
Industry has been sceptical about the so-called ‘Plan Junker 2.0’, focused particularly on sustainable investments and projects for SMEs. The annualised investment proposed represents less than 4% of the Gross Fixed Capital Formation (GFCF) of the whole of the European Union. This amount doesn’t seem enough if we take into account that the current levels of investment registered in Europe are much lower than before the the crisis. In fact, the levels of GFCF in Spain, Italy and the UK are 20% lower than those of 2007, according to a report by Afi.
So what is the balance of the ‘Junker Plan’ in Spain’s case?
Of the 95 projects approved under the Plan, 11 are for Spain. This is a figure which is in line with what Spain’s economy represents in terms of EU GDP. Of these almost 100 approved projects, less than half have been signed up to now (44). Spain has just four projects signed and has received to date 8% of the funds approved. These correspond to Grifols (which specialises in the pharmaceutical and hospital sectors); Redexis Gas (natural gas distribution) and to two credit lines from ICO, one of which is for an infrastructure investment fund.
In the case of Grifols, the total investment in the project is 240 million euros. Its aim is “to promote investigation in the fields of plasma derivative theraphies, diagnosis and medical solutions for hospitals.” The EIB is contributing 100 million euros in funding.
The Redexis Gas project requires an investment of 360 million euros and the EIB has committed to financing 160 million. The question which many experts ask is the following: Did Grifols and Redexis Gas need a ‘Junker Plan’ to finance projects with these kind of characteristics? The overwhelming reply is no.
*Image: Flickr
