European Commission Vice President Jyrki Katainen has called on Cyprus to consider setting up an investment platform combining both the public and private sector in a bid to tap risk-financing from the massive European Fund for Strategic Investments (EFSI) totaling 315 billion euros.
The EFSI, commonly known as the “Juncker Plan,” named after EC President Jean-Claude Juncker, was launched 18 months ago in a bid to promote investments, create jobs and stimulate the EU’s stagnant economy.
Cyprus, along with Malta, has not yet obtained any EFSI financing.
Despite emerging from an almost four-year recession and an EU/IMF bailout, the Cypriot economy, marked by high non-performing loans, continues to pose risks which is pushing interests rates high rendering EFSI financing too costly.
Instead, Cyprus is relying on the European Investment Bank’s much cheaper funding schemes as the Government provides guarantees which offset the EIB’s risk.
In an interview with CNA, Katainen stated that the Cypriot authorities, and private sector investors, should consider setting up an investment platform copying the model by French regional authorities that would enable the island to obtain EFSI financing.
Katainen explained the platform could be “an entity that receives equity investment by private investors, the public sector or regional authorities.”
Katainen added: “This platform in turn would be able to receive EFSI funding, via the EIB, which would enable it to provide cheap and long-term loans either to companies or an association of households.”
Source: CNA
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