With its investment plan and new interpretation of the stability and growth pact (SGP), the European commission has made its first efforts towards overcoming the economic recession and closing the investment gap.
This necessary impetus was a first timid step towards a policy change. It was a shift from the assumption that strict fiscal consolidation and structural reforms will bring Europe back on the path of economic growth, towards the belief that a more balanced approach and badly needed investments are the keys to growth and employment.
A more progressive approach is not just the consequential solution that was reached after a failed crisis management - it was also an economic and political necessity.
High unemployment rates, poverty, a debt-deflation cycle and a hazardous investment gap have led to a loss of trust in the political establishment and the rise of populist and extremist parties all over Europe such as the Front National in France, the Golden Dawn in Greece or UKIP in the UK.
"The EFSI should focus on areas that are currently underfunded, such as infrastructure, broadband and energy efficiency and serve as a complement to other EU tools - not a copy"
The European fund for strategic investment (EFSI) has the potential to start reversing this trend. Nevertheless, while the commission's current proposal is a step in the right direction, it is still unsatisfactory and leaves room for improvement.
In order to be successful, the plan needs to ensure that high quality investments are financed under the EFSI. It is crucial to promote projects that create sustainable jobs and facilitate smart, long-term and inclusive growth - projects with high societal and economic value.
Moreover, projects should deliver real added value and be beneficial to the people in Europe. They should trigger subsequent involvement from the private sector and avoid any 'free-rider' problems, such as the possibility of getting financing from other sources.
With these criteria in mind, the EFSI should focus on areas that are currently underfunded, such as infrastructure, broadband and energy efficiency and serve as a complement to other EU tools - not a copy.
In addition, it is important to endow the fund with sufficient resources. It is essential to further clarify possibilities for contribution from the member states. In this regard it is not only necessary to open the fund for initial contributions but also to create incentives and facilities for financing via investment platforms and national promotional banks.
The diversity of the regions and the local knowhow of entrepreneurs and workers are the backbone of the European economy. Therefore, we need tailored solutions on the ground to develop this potential.
A better regulation of democratic accountability is inevitable, as the EU budget is the EFSI's main contributor. As a co-legislator, the European parliament must play a role in defining the fund's framework and ensuring the efficient use of resources.
Obviously, those who contribute money must be appropriately involved in decision making. Therefore, parliament ought to have a voice in the set-up of the investment plan.
The EFSI's success is essential for the EU as a whole. The crisis deepened income inequalities and economic divergence. Social cohesion is crumbling - trust must be rebuilt.
If we ensure that democratic accountability and efficiency go hand in hand, Europe has a genuine chance for new growth and employment.