The commission's proposal on the European fund for strategic investments (EFSI) had included provisions to finance a guarantee reserve by reallocating existing funds in the EU budget.
MEPs refused to back this, calling on the commission to seek alternative resources for the guarantee, which they insisted should be filled gradually until it reaches the required €8bn and must reassure investors by being "irrevocable and unconditional".
EPP co-rapporteur José Manuel Fernandes said parliament's changes to the commission's negotiating brief had "strengthened the credibility and trust of the fund", adding, "We further reinforced its democratic legitimacy and transparency, enhancing the participation and oversight of the European parliament."
Fernandes also pointed to the reduced impact on the EU's Horizon 2020 and connecting European facility programmes ensured by instead financing the guarantee fund through the annual budgetary procedure.
S&D co-rapporteur Udo Bullmann said the agreement "could be an important step towards closing the investment gap in Europe and is an opportunity for growth and employment".
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"In recent years, we have been campaigning to change Europe's direction from austerity to investment. While growth remains sluggish in Europe, the commission investment plan is a first step in the right direction. [This] compromise has the S&D's stamp on it."
Chair of parliament's budgets committee Jean Arthuis also supported parliament's decision to reject the "deeply regrettable" proposal to raid existing EU funds, calling on the member states to "directly provision the guarantee, as a token of trust and confidence".
"Today the parliament was ambitious and creative. We hope the council will follow suit, for the collective interest of Europe."
On Tuesday, however, Poland already became the sixth member state to announce it will contribute to the EFSI. Following Germany, Spain, France, Italy and Luxembourg's lead, Warsaw has pledged €8bn for projects.
Commission vice-president for jobs, growth, investment and competitiveness Jyrki Katainen welcomed the move, calling it "great news […] that Poland will contribute to the investment plan".
Parliament reacts
EPP group vice-chair Marian-Jean Marinescu said he "supports the Juncker plan", adding, "We need investments to facilitate growth and create jobs. [This] is a concrete instrument in this direction and the EPP group will make all efforts to close negotiations [with council] as soon as possible"
Eider Gardiazabal, S&D spokesperson on budgetary issues, said her group "fully backs the EU guarantee of €16bn granted to the [European investment bank] EIB, to allow them to conduct riskier operations under the EFSI. But the financing of the €8bn for the guarantee fund, which is a liquidity cushion for the EIB in case of failure of an EFSI operation, cannot be financed at the expense of existing programmes which represent important investments for Europe's future.
"The financing of the guarantee fund must not be decided now, it can be built up year by year in the framework of the budgetary procedure, taking due account of all means of flexibility available under the current multiannual financial framework."
ECR deputy Sander Loones, however, raised concerns over the level of political involvement in investment allocation, saying, "We do not want to see this fund politicised."
"The projects that it funds," he stressed, "must be chosen independently based on their likelihood to deliver a return, not because they are a politician's pet project. We must not forget that this is taxpayers' money and taxpayers will expect a return.
The EFSI's operations will be monitored by the European court of auditors, but MEPs have requested the provision of an annual vetting by parliament, including a scoreboard to allow macroeconomic analysis.
"As we go into these negotiations we will oppose attempts to give politicians excessive control over how this fund is allocated," stressed Loones.
Bas Eickhout, from the Greens/EFA, said while his group "would have liked to see more ambition, both in terms of the base funding and the areas to be supported by the plan, this vote has clearly improved draft fund".
"Importantly," he said, "MEPs voted to support a Green proposal introducing a scoreboard to ensure that the investment fund is targeted towards projects that contribute to explicit and clearly defined objectives (like job creation and the EU's 2020 targets)."
"This will strengthen the coherency of the fund. MEPs also underlined the importance of energy efficiency in the context of the fund but we regret there was no majority for Green proposals to earmark funding for energy efficiency."
"We still maintain that supporting the top priority of the fund should be to support a sustainable energy transition under the EU's energy union."
The GUE/NGL group, however, were broadly critical of the EFSI plans, with Fabio De Masi calling them "fundamentally flawed", adding that, "There is ample liquidity in financial markets which could easily be recycled for a true public investment programme with much greater net returns to society."
"The EFSI creates a profit-guarantee scheme for private institutional investors, at the cost of taxpayers. What Europe needs is a 'new deal' of €500bn additional public investment annually over ten years to kick-start the economy and bring an end to the economic and social crisis."
Negotiations with council on the EFSI start on 23 April, with a compromise planned to be up for vote by parliament in June, so as to have the fund operational by mid-2015, in line with the commission's plan.