European Growth Initiative: Commission tables final proposal to EU leaders

November 12, 2003

Brussels, 11 November 2003

A comprehensive action plan spelling out what needs to be done to kick-start investment in networks and knowledge across the European Union has been set out today by the European Commission.

The European Growth Initiative final report has been prepared in close co-operation with the European Investment Bank and is addressed to the December meeting of the European Council. It confirms the Commission's initial proposals aiming to speed up investment in the 29 priority Trans-European transport networks with their subsections proposed by the Commission last October ( IP/03/1322 ).

It equally aims to put the EU at the cutting edge of innovation and technology through the launch of pan-European projects in these areas as spelled out in the Commission's interim report ( IP/03/1321 ). In this way, it reinforces the Union's wider structural reform agenda launched at the Lisbon European Council in March 2000.

The Commission proposal includes a Quick-start programme of 56 projects, which are ready to start immediately, have a strong cross-border impact and will yield positive results in terms of growth, jobs and protection of the environment. The Quick-start programme indicates the projects that satisfy the criteria and on which work should be underway within the next three years at the latest.

The overall level of investment cost from now up to 2010 amounts to some €38 billion in key cross-border sections of the TENs-transport network, €10 billion in key TEN-energy projects and around €14 billion for projects linked to highspeed communications networks and to research, development and innovation. This indicates a very down-to-earth annual investment of around €10 billion per annum to be covered by public and private sources.

Commission President Romano Prodi said: "The European Growth Initiative is a much-needed catalyst for growth and competitiveness in an enlarged Union. It is about taking advantage of synergies and co-ordination in order to raise Europe's growth potential. We now expect the Member States to back up their good words with action. This means delivering agreed and pending reforms and backing growth supporting investments through their national and regional spending plans. Private capital can follow only if we deliver a credible framework and demonstrate commitment to projects with a European dimension. The Commission is presenting a Quick-start programme: to demonstrate that a significant number of cross-border projects can start immediately. This is an open list. The more projects comply with the criteria, the better. I hope governments will be motivated and take often long overdue decisions on these projects. Our objective remains to get all projects completed on time or earlier."

The Commission's Final Report to the European Council follows on the Interim Report adopted on 1 October 2003 ( IP/03/1321 ) and responds to the 16-17 October European Council conclusions.

The Commission's Final Report highlights three important issues:

    It underlines the importance of getting rid of administrative and regulatory barriers which hold back investment. In some cases, this means speeding up decisions on pending reforms. In others, it means taking practical steps such as appointing a single co-coordinator for complex, cross-border projects (as proposed by the Commission in its recent TENs proposals) to synchronise efforts on either side of the borders and drive the projects through the administrative and financial maze they often encounter.

    2. It sets out how projects can be financed through a combination of EU and national funding, European Investment Bank support and private investment. The mix between these different sources of financing will vary from project to project but the strength of the Initiative will be judged on its ability to ensure that all elements work together. It will also involve innovative forms of financing, such as the new Guarantee Instrument that the Commission is proposing. The European Investment Bank is actively committed to the Growth Initiative through its TENs Investment Facility and the on-going i2i initiative. In addition, it has now taken the necessary decisions to reinforce its structured finance facility, through which the Bank finances project risks that it would not otherwise have covered through its traditional lending instruments, with up to €2.5 billion. The EIB is also increasing its support to venture capital by committing €500 million and proposes innovative new instruments such as "securisation Trusts" and loan facilities for medium-sized innovative companies.

    3. It establishes a of Quick-start Programme that meet four criteria: (1) maturity, in the sense of being able to start within the next three years, (2) the cross-border dimension, (3) their impact on growth and innovation, and (4) their positive environmental effects. On the transport side, the Quick-start Programme draws on the full list of the sub-projects of the 29 TENTransport priority list adopted by the Commission last October ( IP/03/1322 ) and puts the emphasis on needed sections which are crucial for the success of the whole project. Also identified within the EU TEN-Energy programme are important cross-border gas and electricity links which can help to reduce the risk of black-outs on the scale recently experienced in some Member States. The focus on broadband, research, knowledge and innovation reflects priorities within the European Research Area or the Union's eEurope goals. The projects identified are the ones which offer a significant return for Europe. For example, supporting complex cross-border transport links can make other national links more viable, helping to attract private investment. By focusing on rail and sea-links we take account of benefits for the environment. Equally, supporting high-speed Internet access, promoting the next generation of key technologies or strengthening Europe's position in Space are part of our Lisbon strategy and can deliver dividends in terms of innovation, cohesion and jobs.

The Quick Start Programme is prepared, as requested by the October European Council (1) , in close co-operation with the European Investment Bank (2) .

In the case of transport TENs, the 31 projects identified require an investment of around €38 billion between now and 2010, while the 17 gas and electricity projects require investment of around €10 billion. For broadband networks, where investment is likely to be led by private investors, total requirements will be identified once member states have provided their national broadband strategies due by the end of the year. But, for example, broadband has benefited from the €6 billion programmed between 2000 and 2006 under EU Structural Funds in support of the Information Society and projects will be eligible for up to €7 billion available from the EIB in the second phase of its Innovation 2010 Initiative. In relation to the research, development and innovation (RDI) projects proposed these should lead to investment of around 10 billion by 2010 . Research projects targeted by the Quick-start programme address cutting-edge technologies in fields such as hydrogen and fuel cells, nanoelectronics and next-generation lasers. In the case of both broadband and RDI projects, the precise scope of projects within the overall areas identified is still being refined through further contacts with interested parties.

For further details see:

(1) The European Council "invites the Commission, the EIB and the relevant formations of the Council to establish, without predudice to the priorities identified in the Commission proposal, a "quick start programme" identifying a list of projects in an enlarged Union based on transparent criteria" ….
(2) T he Commission s list is broader than the list of the EIB, who puts a stronger emphasis on the technical maturity of the projects as selection criteria and which includes national sections of projects.

DN: IP/03/1521 Date: 11/11/2003

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