On December 10, MEP Burkhard Balz, Vice-Chair of the Long-term investment and reindustrialisation Intergroup of the European Parliament, hosted a breakfast debate on how policy impacts growing companies in partnership with Invest Europe and the Invest Week, in the presence of Frédéric Mazzella, co-founder and CEO of major European success story, carpooling service, BlaBlaCar, and David Rubenstein, world-renowned investor, co-founder and co-CEO of The Carlyle Group, as well as Members of the European Parliament, including Dominique Riquet, Chair of the intergroup, officials from the European Commission, and representatives of the industrial and the financial sector and of the civil society.
Burkhard Balz MEP, Vice-Chair of the Long Term Investment Intergroup
David Rubenstein, co-founder and co-CEO of The Carlyle Group
Frédéric Mazzella, founder of BlaBlaCar
Dr. Bert Van Roosebeke, researcher from the Centre for European Policy
Michael Collins, CEO of Invest Europe, the association for private equity, venture capital and infrastructure investors
Alexander Schindler, President of the European Fund and Asset Management Association (EFAMA)
Niall Bohan, Head of Unit for the Capital Markets Union at the European Commission’s DG FISMA
World-renowned investor, David Rubenstein, co-founder and co-CEO of The Carlyle Group, and Frédéric Mazzella, founder of a major European success story, the carpooling service BlaBlaCar, were special guests at this debate on Europe’s approach on how policy impacts Europe’s growing companies, hosted by Invest Europe and the European Parliament’s crossparty Long-Term Investment Intergroup. They discussed the issues with MEPs, including Burkhard Balz, Commission officials, companies and academics.
The EU urgently needs to address its long term investment funding gap, with alternative investment such as private equity and venture capital
The EU is suffering from a lack of funding for infrastructure, the energy transition and the scaling-up of start-ups.
Getting rid of regulatory barriers is a must to attract long term investment into the EU.
MEP Burkhard Balz opened by stressing that the EU urgently needs more private investment and to leverage finance to encourage start-up development. Building on this, Invest Europe CEO Michael Collins said that the US raises five times more than the EU does in venture capital and that it is important to make things easier for long term investors by getting rid of regulatory disincentives.
David Rubenstein, co-founder and co-CEO of The Carlyle Group, said that “it would be helpful if Europe had rules that make it possible for global firms to raise capital in Europe”, citing issues with private placement in some member states. He added that it would be good for Europe if it were easier to raise capital, invest capital and deliver returns to investors. Whilst conceding that “this is not easy to do”, he concluded that if this could be achieved, Europe “would be an even more significant economy in the 21st century”.
For Frédéric Mazzella, founder of the carpooling service BlaBlaCar, “growing a company in the US is like a 100 metre race while in Europe it is like running the 110 metres hurdles race” as “you have to adapt your business to different rules – different VAT, different currencies, different languages”. “Each time it is like creating a new company. I’m in favour of a more unified regulatory environment especially for digital companies that need to reach scale fast. Adapting a product to 28 markets slows us down,” he said.
Alexander Schindler, President of the European Fund and Asset Management Association, argued that Europe urgently needs to harmonise its regulatory environment and its capital markets. He cited the different information requirements of national authorities as a difficulty to be surmounted and the importance of financial education of its citizens.
Niall Bohan, the Head of Unit for the Capital Markets Union at the European Commission’s DG FISMA, said that “funding long term investment is becoming an existential crisis”. He said Europe has an “Achilles heel” in terms of meeting the demand for capital to scale up and expand small companies, which create two thirds of jobs in the EU, and referenced the Commission’s drive to create a venture capital fund of funds to draw private capital back into Europe.
On November 9, the Long-term investment and reindustrialisation Intergroup of the European Parliament held a dinner debate on ESG criteria in the context of the Capital Markets Union (CMU) in the presence of Members of the European Parliament (MEPs), officials from the European Commission, and representatives of the industrial and the financial sector and of the civil society.
On October 20, the Long-term investment and reindustrialisation Intergroup of the European Parliament held a lunch-debate on the topic of energy renovation as a long-term viable investment for the EU in the presence of Members of the European Parliament (MEPs), officials from the European Commission, and representatives of the industrial and the financial sector.
Transport infrastructure projects must be well prepared, with a clear socio-economic return
BRUSSELS – 13 October 2016 – In order for transport infrastructure projects to be successful in the future, a number of improvements need to occur, according to the partners taking part in the European Parliament’s long-term investment intergroup conference.
In an exchange of views at the conference which took place today and focussed on the transport infrastructure pipeline in Europe, the partners agreed that project preparation must be improved, and that the visibility of the projects should be increased via project portals.
The discussion revealed where the existing project preparation practices may be improved, in tune with the emphasis that the World Bank, IMF and MDBs placed on this topic during the annual meetings in Washington, DC last week (IISS Project Assessment Tool). Investment portals should afford a greater visibility of infrastructure projects and the investment environment should benefit from more transparent rules. Available resources should be deployed prioritizing infrastructure developments that create jobs and growth.
Dominique Riquet, President of the Intergroup, said “A good transport project should: be useful from the infrastructure point of view, provide a quality service, fundable by all the parties, generate fair revenues and improve competitiveness of the concerned area.”
European Commissioner for Transport Violeta Bulc said that “the objective of the Commission’s Investment Plan is to boost project pipeline, to attract private investors, and to remove barriers for investments. A good transportation project must generate revenues, but also demonstrate a social and economic value as well as a firm political will to contribute to decarbonisation.”
Olav Jones, deputy director general of Insurance Europe, said: “As the largest institutional investors, Europe’s insurers welcome the significant political focus placed over the past two years on infrastructure investment. In particular, the industry welcomed initiatives to increase the supply of suitable infrastructure assets, and supported work by policymakers to address regulatory barriers to infrastructure investment, such as its treatment under Solvency II. Insurance Europe hopes that these policy efforts will continue in a positive direction for the mutual benefit of all stakeholders.”
Eugene Zhuchenko, Executive Director of the Long Term Infrastructure Investors Association, said “Private investors are looking for a deeper pipeline of infrastructure projects in Europe. We welcome contributions from today’s dialogue to setting better project definition standards, building sponsor’s capacity to develop new projects and implementing frameworks that crowd in more of the private capital”
Marie-Laure Mazaud, Executive Director in charge of Transportation Sector & Development at Caisse des Dépôts et Consignations (CDC), pointed out that “the recent transposition of the new EU directives on public procurement and concessions in the French regulation constitutes a particularly rich and complete toolbox allowing the local authorities to fund their investment projects in optimal conditions, including PPPs. This framework offers all the guarantees and ingredients necessary to implement win-win projects for both the public and the private sectors, while financial resources have never been more abundant and attractive. CDC will support this trend and mobilize its engineering expertise to structure and finance such projects through equity investments and loans”.
Jean-Louis Marchand, FIEC President, concluded “The Investment Plan for Europe needs to reach the regions if we want it to be successful. For this purpose, the visibility of infrastructure projects at the regional scale should be strengthened. The creation of portals of regional projects, that could be part of the European investment project portal (EIPP), can be a response to these needs.”
The Intergroup is designed to support and promote the issue of long-term investment in perspective of future legislative work. Its creation followed a campaign conducted by organizations from the public and private financial spheres and contributors to the real economy. Three major national promotional banks and institutions, Cassa Depositi e Prestiti, the Group Caisse des Dépôts et Consignations and KfW Bankengruppe, have played a particularly active role. The intergroup is chaired by Dominique Riquet (ALDE-FR), Simona Bonafé (S&D-IT), Adina-Ioana Valean (PPE-RO) and Burkhard Balz (PPE-DE). Currently, the Intergroup has reached 80 members has received the support of some 50 professional federations and stakeholders.
About the partners:
FIEC is the European Construction Industry Federation, representing via its 29 National Member Federations in 26 countries (23 EU & EFTA and Turkey) construction enterprises of all sizes, i.e. small and medium-sized enterprises as well as “global players”, carrying out all forms of building and civil engineering activities.
Founded in 2014, the Long Term Infrastructure Investors Association (LTIIA) gathers investors that collectively manage in excess of 5 trillion dollars of assets and that include some of the most active investors globally in the field of long term investment in infrastructure. The Association’s three key priorities at the core of its action: (i) proactive engagement with public stakeholders to support attractive investment frameworks, (ii) development of financial performance benchmarks, and (iii) definition and sharing of best practices in relation to Environmental, Social and Governance issues. See www.ltiia.org for more information.
Insurance Europe is the European insurance and reinsurance federation. Through its 34 member bodies — the national insurance associations — Insurance Europe represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs. Insurance Europe, which is based in Brussels, represents undertakings that account for around 95% of total European premium income. Insurance makes a major contribution to Europe’s economic growth and development. European insurers generate premium income of €1 200bn, directly employ over 975 000 people and invest nearly €9 800bn in the economy.
Caisse des Dépôts et Consignations (CDC) is designated by the French law as a long-term investor and a public group dedicated to promoting the general interest and the national economic development. With a balance sheet of €156bn, the Caisse des Dépôts Group provides in particular financial support for infrastructures projects and, through its subsidiary Bpifrance, to enterprises. CDC also manages assets on behalf of the French State, notably the savings funds for €260bn. For almost 200 years, it has never failed in its mission, whatever the economic situation, thanks to proven know-how: an excellent awareness of local issues, a capacity to construct links between the public and private sectors, to create innovative solutions which respond to collective needs. At European level, CDC is one of the core sponsors of the Marguerite Fund, which provides financing to projects in the field of energy and transport infrastructures as well as renewable energy and fight against climate change.
The OECD has released a Progress Report which updates analysis in the OECD’s 2015 Report for G20 Finance Ministers and Central Bank Governors “Mapping Channels to Mobilise Institutional Investment in Sustainable Energy” (OECD, 2015a). The report is also provided as a contribution to the “Greening Institutional Investors” sub-group of the G20 Green Finance Study Group, co-chaired by the People’s Bank of China and the Bank of England.
The report gives a review of institutional investment in green infrastructure (focused on renewable energy) that is occurring organically, as in where governments set an investment-grade enabling environment but do not deploy any further intervention to mobilise institutional investors. A stock-taking section follows, focused on institutional investment in green infrastructure where the public or official sector has deployed a risk mitigant or transaction enabler to open up the supply of investment. This section is accompanied by a research database to be made available on the OECD website. A summary section with implications for further research concludes the main body of the report. Finally, a fifth, self-contained section of the report, prepared by the World Bank Group as an input to the report, provides a preliminary description of the role of sovereign wealth funds (SWFs) and strategic investment funds (SIFs) in green finance.
As part of the European Week of Regions and Cities (Open Days), the European Committee of the Regions (CoR) will host a workshop on overcoming obstacles to investment, on October 12. Markku Markkula, President of the CoR, will discuss with representatives of the OECD, think-tanks and academia on how to boost long-term investments most conducive to innovation, productivity and growth, the local and regional authorities need fresh financial resources, to be seen as partners by their national governments and to improve their administrative capacity.
On July 22, 11 MEPs from the long-term investment Intergroup wrote to Vice-President Dombrovskis to call for the Commission’s opposition to the Basel Committee proposal to increase the Risk Weighted Assets for specialized lending and infrastructure financing.
On September 21, They received an encouraging reply of VP Dombrovskis, who confirms that “the Commission is considering creating, as part of the forthcoming CRR/CRD review, a special asset class and the associated criteria for less risky bank lending to infrastructure projects which could benefit from reduced capital requirements“.
On 4 October, the international economic policy think tank Bruegel will organise an event on the potential impediments to long-term investment in the EU. Various factors such as accounting rules, market failures, prudential regulation and fiscal disincentives can discourage long-term investment. As stated by Grégory Claeys, Research Fellow at Bruegel, “this can be problematic because long-term potential growth of advanced economies like Europe relies mainly on productivity gains which are derived from investments in innovation, infrastructures, human capital and knowledge“. A panel discussion featuring Sophie Barbier Director for European Affairs at Caisse des Dépôts et Consignations, Miguel Gil-Tertre, member of the Cabinet of Vice-President Katainen, Sandra Rigot, Professor at Paris 13 University and Edoardo Reviglio, Cassa Depositi e Prestiti’s Chief Economist, will be followed by a Q&A with the audience chaired by Grégory Claeys.