The European Commission's new President has presented a plan to leverage 300 billion euros of largely private new investment in the EU. But as Amy Pollock reports many doubt it will work without more public funds.
It's a big problem and it'll take an ambitious plan to get Europe growing again. Just weeks into a new job Jean Claude Juncker thinks he has one. The new European Commission President is to leverage 300 billion euros of largely private new investment. (SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT, JEAN-CLAUDE JUNCKER, SAYING: "Today Europe is turning a page after years of fighting to restore our fiscal credibility and to promote reform. Today we are adding the third point of a virtuous circle, an ambitious yet realistic investment plan for Europe. Europe needs a kick-start and today the Commission is applying the jump cables." But could the euro zone motor also need a service? Several countries have recently put the brakes on their reform programmes. And Europe can't get the wheels turning properly without them, says CCLA's James Bevan. (SOUNDBITE) (English): JAMES BEVAN, CIO, CCLA INVESTMENT MANAGEMENT, SAYING: "I think we have to see a very material step in the right direction by the European authorities in terms of encouraging radical structural reform and until we get those measures, I don't believe that private money will flow significantly into the euro zone project." Juncker accepts the plan lacks any significant public funding - just eight billion euros has been set aside to help provide 21 billion euros of capital for a special fund managed with the European Investment Bank. It's hoped the fund will trigger 315 billion euros over the next three years. Juncker believes the money is out there - partly thanks to the ECB trying to ward off deflation - and there will be interest in safe investment opportunities. Christian Schulz from Berenberg Bank says it might work but it's no quick fix. SOUNDBITE (English) SENIOR ECONOMIST AT BERENBERG BANK, CHRISTIAN SCHULZ, SAYING: "The EU Commission can help by supporting structural reforms, but as Mr Juncker's demonstrated it can also help by providing a bit more money to fund projects and I think in that sense, it's a good step. But ultimately this is not a gamechanger." Juncker's reputation is also partly at stake. A row about his involvement in controversial tax laws introduced in Luxembourg while he was Prime Minister rumbles on. Success at the EU will at least offer alternative headlines.