European Union leaders approved a 120 billion-euro ($149 billion) plan to promote growth in the 27-nation bloc that includes a capital boost for the European Investment Bank.
The government chiefs agreed on a 10 billion-euro capital increase for the EIB today as a centerpiece of the long-term growth plan, which includes infrastructure financing, tax-policy pledges and more focused use of EU funding. It also calls for project bonds and support of small and medium-sized businesses
The growth agenda is a sign of our unrelenting commitment,” EU President Herman Van Rompuysaid in a press conference in Brussels on the first day of a two-day summit. “It brings together all concrete measures that we will swiftly take.”
The growth plan came before leaders took on the thornier measures to prevent the euro area’s financial crisis from swamping Spain and Italy. They’ll discuss buying Spanish and Italian government bonds to bring down borrowing costs that are near euro-era records, Finnish Prime Minister Jyrki Katainen said. He also proposed that bailout funds buy collateralized government debt in primary markets.
Van Rompuy said other elements of the growth-promoting strategy, such as those dealing with financial stability and the future of the euro, have not yet been finished.
The leaders will continue meeting tonight to discuss the long-term future of the EU and its 17-nation common currency. “We are making progress,” he said, adding that debate on short-term measures isn’t blocking the path to agreement. Leaders also continue to discuss an EU patent, he said.
German Chancellor Angela Merkel endorsed the growth plan before the meeting started, calling it “a good program, especially in terms of future-oriented investment and above all in terms of more job opportunities especially for young people.”
The Luxembourg-based EIB could use its capital infusion to increase its lending capacity by 60 billion euros and unlock 180 billion euros of additional investment, according to EU estimates. (Further reading Bloomberg)
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PS Finally we can go for short vacation and hope you still pay in Euro when we check out…