I am among those who are very disappointed with the outcomes of EFSI’s first year. The Commission’s euphoria about the results cannot be reconciled with the reality. But I am unsurprised things have turned out this way. The financial fundamentals of EFSI, based on relatively insignificant “own” funds, levered extensively through guarantees to surpass 300 billion euros with private capital, militate against a choice of projects considered by markets as having low payoffs or too risky. The institutional fundamentals of EFSI, tied into the European Investment Bank framework, constrain the Fund to follow the EIB operational model. The claim is that some low risk, longterm infrastructural projects launched by EFSI would have featured as an EIB project otherwise. Similarly projects have been concentrated in infrastructural areas which can only be considered as “safe”. For them, non-EFSI finance could easily have been found. There is too a concentration of projects in the bigger economies of the Single Market, with southern and other peripheral small economies practically not featuring at all. Indeed, one could claim that EFSI is providing an example of how under EU initiatives, a transfer of resources from the periphery to the centre is occurring, further emphasizing structural divergences.

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