EU investment: Juncker's cunning plan

EU investment: Juncker's cunning plan

Press quote (BBC News)
17 December 2014
To kickstart the economic revival that Europe so desperately needs, the investment stimulus should be synchronised with a monetary stimulus from the European Central Bank (ECB), in other words "quantitative easing" (QE), argues John Springford at the Centre for European Reform (CER), who has analysed the Juncker scheme.

...There are other reasons why the investment scheme may be hard to pull off.

Turning €21bn into €315bn means "fifteen-times leverage, and there isn't a precedent for that in an investment fund using public sector money", Mr Springford told the BBC. "That is pretty high gearing even for banks."

National rivalry could also be an obstacle. "It seems the point of the fund is to help the eurozone, and the East Europeans are worried about that, especially the Czech government," Mr Springford said.

John Springford's corresponding insight 'Public investment: A modest proposal' can be read here.