EU backs massive investment plan
BRUSSELS, Belgium (Reuters) -- European Union heads of state and governments endorsed on Friday a multi-billion euro plan to encourage public and private investment into transport and research projects in a bid to revitalize the bloc's economy.
EU leaders gave their blessing to a 62 billion euros "quick start'' list of priority projects to be launched over the next three years and funded through a combination of EU and national funds, European Investment Bank loans and private money.
"This is the first economic policy action taken in the European Union since its inception,'' Italian Prime Minister Silvio Berlusconi, who is chairing talks mainly focussed on the drafting of a new EU constitution, told a news conference.
"This will help gross domestic product, will help employment, will facilitate communications within the European Union and with the new EU members.''
Analysts said the ambitious plan, called the European Action for Growth, is likely to have a negligible impact on the bloc's output, but may help improve competitiveness in the long-term.
Europe is lagging behind the United States in terms of productivity and many blame the lack of efficient cross-border infrastructure and negligible investment in R&D.
Priority projects
The priority list includes projects such as rail tunnels through the Alps, high-speed railways but also cross-border gas and electricity links and innovative research projects such as hydrogen power and laser technologies.
The EU will contribute from its budget with up to 20 percent for cross-border project, while the EIB has pledged to help with long-term loans. The EU hopes 40 percent of the overall costs will come from the private sector.
"The mobilization of private resources to finance qualifying projects is the cornerstone of the Action for Growth,'' read the summit draft conclusions.
The European Commission, which drafted the details of the plan, said more projects could be added to the list once they fulfilled a set of agreed economic criteria.
"The list is not final. As soon as new projects meet the criteria the list can be completed,'' Commission spokesman Reijo Kemppinen told a news conference.
The initiative has been slimmed down from an initial proposal of investment worth 220 billion euros for transport only that included pharaonic projects such as a bridge over the Messina strait from Sicily into mainland Italy.
Following pressure from the Nordic states and Britain the initiative, initially focussed on transport, was widened to include telecommunications and research in line with an EU agenda for competitiveness agreed by EU leaders in 2000.
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