Europe needs a "shock therapy" to exit the crisis

Pittella: IMF should stop playing with fire and learn from past mistakes. Greece must remain in the Eurozone, head of the International Monetary Fund (IMF), Christine Lagarde, Maria João Rodrigues, austerity,  Grexit,

S&D Euro MPs today proposed to set up a new €400 billion fund as part of an investment plan to boost growth and create jobs in Europe.

The plan was unveiled during a press conference today in Brussels.

S&D Group president Gianni Pittella stated:

"For the first time after the Barroso era, growth and flexibility are seriously being taken into account at Commission level. This new approach could represent the beginning of a revolution for Europe.

"We want a shock therapy to be put forward. A shock therapy carried out by new fresh money - public and private - to be invested, a new European investment instrument to be created and finally the adoption of the 'investment clause' associated to Juncker's investment plan: public money put in place by member states for selected European projects should not be calculated in the national deficit.

"There is no more time for a middle of the road strategy. This is the time for brave and wise decisions. We propose a shock therapy to recover our economy and to save Europe from the hands of social fights, populisms and European disintegration."

S&D Group vice-president on sustainable development Kathleen van Brempt said:

"Investments in no matter what won't get Europe back on track. So what's important is not only the quantity of the investments but where the money is invested.

"The transition towards a sustainable and resource efficient economy is the overriding priority and the only way forward. Investments should be targeted towards energy transition and energy efficiency, towards the digital economy and innovation and towards human capital, thus boosting job creation. Europe should focus on projects which could never flourish without a share of public investment."

S&D Group vice-president on economic, financial and social affairs Maria João Rodrigues added:

"Europe is now facing the risk of a long period of low growth and mass unemployment. We are also confronted with an investment deficit estimated at €300 billion per year. Member states need to recover flexibility in order to be able to invest. Both private and public investment must be revived. Public funds must serve as a leverage to attract private investments. A slight element of subsidy, such as an interest-free loan, could unlock many important projects which otherwise could not afford financing on purely commercial terms. European investments should also cover all EU member states and be aimed at supporting regions in crisis."

S&D Group vice president for budget Isabelle Thomas stressed:

"We will not support a “fake” investment plan. We need fresh money. That is why we propose to create a special fund. The initial capital would gradually be provided by EU member states in order to reach €100 billion within six years. These national contributions should be exempt from the calculation of the public deficit and public debt.

"On this basis, the fund could mobilise an additional €300 billion provided by private investors. This public financial capacity of €400 billion could generate a total of €500 billion of public and private investment."


Find out more here

Ending the crisis and building new sustainable and shared prosperity

Related documents 
S&D Group's Position Paper on : Ending the crisis and building new sustainable and shared prosperity. Our call for an ambitious European investment strategy
Graph : Ending the crisis and building new sustainable and shared prosperity