Courtesy of Mish.
Juncker’s €300 Billion Plan is “Funny Money”
I was rather amused yesterday with a post by Pater Tenebrarum on the Acting Man blog: EU Planning to Spend Money It Doesn’t Have.
Pater is of course correct, and we will return to his article in a moment.
First, consider this headline from El Economista: France calls for a New Deal with ‘real’ investment: 300 Billion plan is “funny money”.
€80 Billion in “Real Money” Requested
There is no need to translate excerpts from El Economista because the Financial Times has essentially the same story in France warns EU investment fund will flop without ‘real money’.
France says the EU must inject up to €80bn of “real money” into the flagging European economy, warning that a big investment plan being drawn up in Brussels risks flopping if enough hard cash is not used to stimulate demand.
Jean-Claude Juncker, the new head of the European Commission, is next week expected to unveil a €300bn investment programme for the next three years aimed at boosting growth through infrastructure and other projects.
Emmanuel Macron, France’s economy minister said “I’m convinced we need real money and we need to use it in an effective way.”
He proposed a new independent entity to oversee what some are calling a “New Deal”. The overseer would increase the fund’s firepower by raising debt on the markets to fund investments in projects such as fibre optic networks and renewable energy. It would also set up panels of European experts to select projects after a competitive process.
EU officials briefed on Mr Juncker’s plan said there was unlikely to be any new money. Instead, only existing public resources will be used, with the hope that this will attract private capital to bolster the fund.
Mr Macron insists the changes will win parliamentary approval. “We have 10 per cent unemployment, 25 per cent youth unemployment. What is the alternative solution? Spend more money that we don’t have? It’s not conceivable. It’s a real leftwing package, it’s a package for the outsiders, it is aimed at restoring equal opportunities.”…
