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EU members submit projects for funding

Brussels - EU member states have submitted 2 000 project proposals for funding under a new investment plan being implemented by the bloc, sources said Sunday.

European Commission President Jean-Claude Juncker unveiled the €315bn plan last week, as part of a bid to boost growth and jobs in the crisis-battered European Union.

The bloc's eurozone currency area emerged from recession last year, but growth has been lacklustre, unemployment has been stubbornly high and inflation is far below target.

"No tree can grow on soil and air alone," Juncker had said. "The investment plan ... is the watering can."

The 2 000 projects that have been submitted so far have a combined value of about €1.3trn, according to EU sources. The commission, the EU's executive, hopes to receive even more proposals as time goes on.

Which projects will eventually be funded is to be decided by experts -for instance from the European Investment Bank (EIB) - so that the decision is not politicised, the source said.

A report featuring the initial 2 000 projects is due to be released on Tuesday.

On the same day, EU finance ministers will be presented with a pre-selection of 760 projects, the German news magazine Spiegel reported Sunday. It said most projects are not new, but have been in planning for years.

Germany, the eurozone's economic powerhouse, has reportedly submitted more than 70 projects.

The aim of the investment plan is to create guarantees out of existing EU funds, to encourage private investors to put their money into projects considered at present to be too risky.

Jyrki Katainen, the commission's vice president for growth and jobs, told Spiegel that the quality of the projects is "more important than anything else if we want the private sector to invest."

The investment plan foresees the use of the existing EU budget for a €16bn guarantee, while the EIB would commit €5bn. This, in turn, is expected to attract a 15-fold volume in private investments, totalling €315bn.

A new investment fund managed by the EIB will be set up to finance infrastructure projects in areas such as broadband data connections, energy and transport, education, research and innovation.

The commission wants the plan, which requires the approval of EU governments and the European Parliament, to come into effect by the middle of next year. The sources expressed hope that projects could start to be funded from June.

EU leaders will consider endorsing the investment plan at their next Brussels summit on December 18 to 19.

Juncker also urged EU member states to contribute to the new fund, but diplomats have warned that this could prove controversial.

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