17 Amendments of Hans-Olaf HENKEL related to 2016/2064(INI)
Amendment 1 #
Draft opinion
Paragraph 1
Paragraph 1
Amendment 9 #
Draft opinion
Paragraph 1 a (new)
Paragraph 1 a (new)
1a. Strongly supports the ambition of the Commission to overcome the investment gap and strengthen the incentives in the private sector to invest in and boost the sustainable growth of the European economies; for this reason, however, firmly opposes the activities of the EFSI that undermine these goals and are not a solution but rather part of the problem;1a __________________ 1a As of July 2016, the EFSI approvals ensured 37% of its original goal of €315 billion in the new investments (289 approved transactions in total). Some say the existence of these investments is a success of its own, as they would not have existed without the fund. This statement is a mistake that indicates lack of economic understanding.
Amendment 10 #
Draft opinion
Paragraph 1 b (new)
Paragraph 1 b (new)
Amendment 11 #
Draft opinion
Paragraph 1 c (new)
Paragraph 1 c (new)
1c. Reminds that in principle, there are little differences between the EFSI and standard European funds; believes that the main difference is in the extent of support - while standard European funds finance most of the costs of the supported projects, the EFSI provides a loan for the part of the project; thus, EFSI can support more projects for less taxpayers' money but only in the cost of dead-weight loss, shifting of resources and moral hazard;
Amendment 12 #
Draft opinion
Paragraph 1 d (new)
Paragraph 1 d (new)
1d. Acknowledges the dead-weight loss; reminds that EFSI supported financing of Normandy Dairy Production Facility and Polish milk powder factory while there is a general excess capacity in the diary production; reminds also that the same applies for the EFSI support of the wind farms while there are excess capacities for the electricity production in Europe; believes that EFSI must stop financing ordinary projects which deforms standard market competition; 1c __________________ 1cThe EIB declares that the EFSI “remains focused on the specific objective of addressing the market failure in risk- taking, which hinders the investment in Europe. In doing so, the EFSI will also increase the volume of high risk projects supported by the EIB Group.” The EFSI also finances a Slovak PPP project; a construction of approximately 27 km of the D4 motorway around Bratislava, which is to connect to the R7 expressway (outside the scope of EIB financing). Paradoxically, while the contribution to the transport capacity of the D4 remains controversial, the more necessary R7 will not receive an EFSI funding. Moreover, there is no reason to assume this D4 PPP project would not find sufficient funding without a help from the EFSI.
Amendment 13 #
Draft opinion
Paragraph 2
Paragraph 2
Amendment 20 #
Draft opinion
Paragraph 3
Paragraph 3
Amendment 32 #
Draft opinion
Paragraph 3 a (new)
Paragraph 3 a (new)
3a. Urges that moral hazard shall not be overlooked; stresses that even partial loses of the investments supported by EFSI can cause 100% loss of the European taxpayers money due to high level of leverage the EFSI uses; stresses also that taxpayers unwillingly bear the risks of the failed investments;
Amendment 34 #
Draft opinion
Paragraph 4
Paragraph 4
Amendment 40 #
Draft opinion
Paragraph 4 a (new)
Paragraph 4 a (new)
4a. Stresses that profitability of projects cannot be counted simply by looking at the cash flows; stresses that, in addition to adjustments for lost income from alternative use of the resources (e.g. what would happen if the resources were never taken from the hands of the taxpayers), the investment risk calculation must be considered as well; believes that, since risk is what seems to be one the main reasons for the lack of private investments in the EU, its inclusion can throw many EFSI projects into red numbers;4a __________________ 4a The profitability of the investments approved by the EFSI should not be compared to the situation where no other investments are made by the private sector. Instead, the profitability of the EFSI should be compared to an alternative scenario in which the public sector eliminates the investment uncertainty it created and which caused the investment gap in the first place: deficit public spending; failure of the regulatory role of the banking system; and bureaucratic, regulatory and tax burden it forced on private investors. These are the key issues that have not yet been addressed.
Amendment 41 #
Draft opinion
Paragraph 5
Paragraph 5
Amendment 45 #
Draft opinion
Paragraph 5 a (new)
Paragraph 5 a (new)
5a. Acknowledges that the most important effect of EFSI activities is shifting of resources as every euro the EFSI lends for the investments it supports is a euro that was taken from the hands of a private lender; stresses that, if a private entrepreneur makes an investment that EFSI is willing to support, he will not realize an investment that he could otherwise accomplish without the help from EFSI;5a __________________ 5aEvery investment inevitably carries a level of risk and therefore investing is a natural role for the private sector. When people invest their own capital, they carefully consider potential profits and losses of their investments as well as the credibility of the borrower. Risks (and thus both profits and losses) stay in private hands. If the EFSI applies high standards set by professional investors from the private sector, there will be no reason for its existence, as its role will already be fulfilled by the private sector. The very existence of the EFSI is therefore problematic: the EFSI uses public resources to incite investments that are too risky for private lenders to take, while the private sector and taxpayers bear the risks of failing EFSI investments.
Amendment 47 #
Draft opinion
Paragraph 6
Paragraph 6
Amendment 52 #
Draft opinion
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Underlines that the EFSI shifts the capital from the market-driven projects where they would be most effective to the projects driven by the EFSI bureaucrats where they are less effective; underlines that economy as a whole therefore loses;6a __________________ 6aThe EFSI is an entity that does not solve the causes of the investment gap, but rather shifts the risks that private lenders are not willing to take to all European taxpayers. The resources of the Public sector are solely those it has obtained in taxes from the Private sector. Every public euro used for the activities of the EFSI is therefore missed in the private sector, which makes the situation for the future of private investments even worse.
Amendment 53 #
Draft opinion
Paragraph 6 b (new)
Paragraph 6 b (new)
6b. Acknowledges that EFSI enables avoiding fiscal rules; stresses that national contributions to EFSI are considered one-off measures, respectively a "relevant factor" in terms of assessing the deficit; as a result, stresses that several countries struggling with fiscal problems including the ones with public debt exceeding 60% GDP cap rule or 3% GDP deficit rule pledged billions of euros in contributions on EFSI projects;
Amendment 57 #
Draft opinion
Paragraph 7
Paragraph 7
Amendment 63 #
Draft opinion
Paragraph 7 a (new)
Paragraph 7 a (new)
7a. Recommends to reject the Commission proposal to extend the EFSI beyond 2018 and to stop providing any further loans from the EFSI.