€803 million invested in Estonia under Juncker Plan

Estonia's GDP per capita has increased significantly since it joined the EU in 2004.
Estonia's GDP per capita has increased significantly since it joined the EU in 2004. Source: AFP/Scanpix

Altogether €335 billion has been invested in the European economy in the framework of the European Commission's Investment Plan for Europe (EC IPE), €803 million of which has been invested in Estonia. Relative to the national GDP, Estonia comes in second in terms of the volume of investments.

The European Commission and the European Investment Bank (EIB) Group have delivered on their pledge to mobilize €315 billion euros in additional investment under the EC IPE, known as the "Juncker Plan." Backed by a budget guarantee from the EU and own resources from the EIB Group, 898 operations have been approved which are expected to trigger €335 billion in investments across the 28 EU member states, the European Commission said.

According to European Commission President Jean-Claude Juncker, the plan has proven to be a success.

"We surpassed the original €315 billion investment target and the European Fund for Strategic Investments (EFSI) is set to create 1.4 million jobs and increase the EU GDP by 1.3% by 2020," Juncker said. "We have financed projects which without the EFSI would not have been possible, and all without creating new debt: two thirds of the investment comes from the private sector. From financing job-training for refugees in Finland to renewable energy in Greece to farming in Bulgaria — we will continue to use the EU budget for what it does best: to catalyze growth."

"By adopting a market-driven approach and making strategic use of the EU budget, we have supported hundreds of innovative investment projects and helped thousands of small businesses to scale up," said European Commission Vice-President Jyrki Katainen. "As a result, we have improved Europe's competitiveness and already supported at least 750,000 jobs across the EU. Thanks to the Investment Plan and to the efforts member states have implemented in national structural reforms, the investment outlook in Europe is bright."

Measured in relative to economy size, the greatest impact has been in countries that were hit hard by the crisis, i.e. Cyprus, Greece, Ireland, Italy, Portugal, and Spain. While the direct investment impact is particularly high in those countries, calculations reveal that cohesion regions, i.e. mostly Eastern European countries, are likely to benefit more from long-term effects.

In Estonia, the EFSI's €112 million guarantee is to trigger €803 million in investments. Estonia currently ranks second among 28 member states in terms of EFSI-related investments triggered relative to GDP. Projects supported in the framework of the Juncker Plan include for example the expansion and upgrading of Tallinn Airport, the development of the producer of ultracapacitor-based energy storage devices Skeleton Technologies, and the expansion of the bakery Muhu Leib.

The EC IPE was launched in November 2014 to reverse the downward trend of low-levels of investment and put Europe on the path to economic recovery. On 12 December, 2017, the European Parliament and member states agreed on the regulation to enhance the EFSI and extend the investment target to €500 billion by end of 2020. On 6 June, the European Commission presented its proposal for the successor to the Juncker Plan for the next multiannual financial framework, the InvestEU Program.

Editor: Aili Vahtla

Source: BNS

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