Investment Program Targets Greece, the Baltics

Investment Program Targets Greece, the Baltics

THE EUROPEAN UNION HAS approved funds to its member countries as part of program to boost investment, and smaller nations will be big winners.

The program, called the European Fund for Strategic Investments (EFSI), published its investment plans for countries in the bloc, with Greece topping the list for triggered investments as a proportion of countries’ national gross domestic product.

The investment program was launched in 2015 after EU member states experienced sluggish growth and low levels of investment following the 2008-09 financial crisis. The program serves as a “guarantee” for the EU budget.

Following the 2008-09 financial crisis Greece suffered its own government-debt crisis, triggering one of the longest recessions of any advanced capitalist economy. It has slowly started to experience modest growth in its economy.

According to the EU, this allows the European Investment Bank to “finance operations that are riskier than typical investments, support highly innovative projects, provide risk financing to small companies without a credit history, and finance a greater quantity of projects and small and medium enterprise agreements than would have been possible without the EU budget guarantee’s backing.”

The program is expected to trigger about $450 billion in investments that will impact about 950,000 small- and medium-sized enterprises, officials say.

The program covers investments in agriculture, digital businesses, energy, environment and resource efficiency, research development and innovation, social infrastructure, transportation and various smaller companies. More than 30 percent of the investment program funding is on small companies across the EU.

Among other aspects of the program:

About a quarter of the money will go for research and development, 18% for energy projects, 11% for digital projects, 7% for transport projects, 5% for projects related to social infrastructure, and 4% for those related to environment resource efficiency.
Greece received the most funding as a proportion of its GDP. The European Investment Bank approved an EFSI financing of about $3 billion, which officials expect will trigger investments of about $13 billion.
The other countries receiving the greatest share of funding as a proportion of GDP include stonia, Bulgaria, Portugal, Spain, Lithuania, Poland, Latvia, Italy and Finland.
Receiving the lowest amounts of investment funding as a proportion of GDP are Malta, Cyprus and the United Kingdom.
By July 2018, the EFSI had already mobilized $376 billion in additional investment across the EU since the program’s 2015 launch. By 2020, the European Fund for Strategic Investments is expected to trigger more than $560 billion.

So far, the European Investment Bank has invested in hundreds of projects and provided risk financing for hundreds of thousands of small and medium companies in various strategic areas in all 28 EU nations.