The European Commission today laid out details of an initiative to boost growth by increasing infrastructure spending, which has been championed by current European Union president Italy.
A Commission document obtained by Reuters showed the plan foresees the European Investment Bank (EIB), the EU's long-term financing arm, would play a key role.
"The EIB through its TEN (Trans-European Network) Investment Facility would also help by providing senior loans...for an estimated amount of 50 billion euros until 2010," it said.
The Commission, the EU executive, said the EIB would also make more use of its existing Structured Finance Facility for priority projects. Next week finance ministers will discuss the plan, which the Commission said had scope to boost confidence in the short term.
"These actions will yield short-term benefits through (a) boost in confidence that is likely to come from the strong signal that Europe is building its long-term future."
EIB Deputy President Mr Gerlando Genuardi said yesterday the Commission needed to set out a clear legal framework to attract investors to EIB debt which could be sold as part of an infrastructure spending plan.
He said national public-private partnerships had worked well in the past but that investors might have doubts about funding cross-border projects that would likely be subject to different rules and taxes. Moreover, it is not just EIB money that could be ploughed into road, rail and energy projects.
The Commission said the plan was to encourage private capital to be ploughed into the infrastructure projects and that it would take steps to encourage such private investment.
This chimes in with comments made by Italian Economy Minister Mr Giulio Tremonti, the new chairman of EU finance ministers, who said yesterday that some public funds, such as state savings funds, could be used alongside private capital and EIB money.