Juncker plan 'lacks both legitimacy and vision'

Questions must be asked as to why the Juncker investment plan focuses on big corporations, writes Victor Negrescu.

By Victor Negrescu

Victor Negrescu (RO, S&D) is a vice-chair of Parliament’s Culture and Education Committee and a member of Parliament’s Budgets Committee

29 Jan 2015

To say that the European Union is still facing important economic and political challenges is an understatement. The difficulty of our predicament however lies not only in the size of the problems we are facing, as the economic indicators might emphasise at first glance, but in correctly identifying the causes which lie at the root of our present situation. Over the past couple of years, many policies were enacted, without taking into account their soundness. The troubling reality we have to face today is that in numerous instances, the cure had worse effects than the disease. It is precisely because European societies and citizens have been harshly hit by the effects of the economic crisis and by the fall-out of the austerity measures that we find ourselves here - in a climate marked by insecurity, uneven development, poverty and social exclusion.

I am one of the strongest supporters of public investment. I believe that by developing infrastructure not only can we increase the competitiveness of the European economy, but also create positive conditions for economic growth. At the same time, public investment also increases the interconnectedness of European societies, thus supporting the European project. I do not believe, however, that the Juncker investment plan is a step in this direction.

The project will only increase the development gap between the EU's most prosperous and poorest regions. The economic crisis has indeed affected all societies. We must acknowledge that the consequences of the crisis and of austerity policies have been had the most impact on peripheral member states. If the investment plan is enacted in its present form, then it is peripheral regions which will continue to see underdeveloped infrastructure, declining education and healthcare services. The investment plan indirectly favours more developed states: given the current co-financing rules, most eastern and southern European states will be unable to access the hyped projects of the investment plan. In net terms, the less developed and poorer states of the European Union stand to lose.

"Economic developments over the past couple of years demonstrate that big corporations have been, in most cases, capable of weathering the storm"

Moreover, the experience and the data concerning economic developments over the past couple of years demonstrate that big corporations have been, in most cases, capable of weathering the storm. Many have recorded profits in spite of the economic circumstances.

I believe that the commission's plan to support larger companies, rather than small and medium sized enterprises (SMEs). Only €75bn of the €315bn is allotted to the SME sector. This is a troubling prospect for several reasons. SMEs tend to play an important social role in less developed regions and it is the SMEs which were most impacted by the crisis. Most large companies and corporations are based in the richer EU regions.

Other aspects are also a cause for concern. The procedure for project evaluation is unclear. The fact that a six person committee will decide upon investments via simple majority rules is the most troubling of all. Considering that we are dealing with a vital instrument for the development of our economies, we have to think of more equitable approval procedures. The EU has been criticised for its lack of transparency - the investment plan under these circumstances lacks both legitimacy and vision. In conclusion, I would question whether the investment plan is about saving the commission president Jean-Claude Juncker or the European Union?

 

Read the most recent articles written by Victor Negrescu - Europe in Recovery: Europe’s cultural and creative sectors

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