- Title: Italy may be facing period of uncertainty, Germany's Schaeuble says
- Date: 6th December 2016
- Summary: BRUSSELS, BELGIUM (RECENT - NOVEMBER 2016) (REUTERS) VARIOUS EXTERIORS OF EUROPEAN UNION COUNCIL BUILDING
- Embargoed: 21st December 2016 16:44
- Keywords: EU Italy Germany Finance Minister Banks Renzi Government Schaeuble
- Location: BRUSSELS, BELGIUM
- City: BRUSSELS, BELGIUM
- Country: Belgium
- Reuters ID: LVA0015BQZHAF
- Aspect Ratio: 16:9
- Story Text: German Finance Minister Wolfgang Schaeuble said on Tuesday (December 6) he was concerned that Italy might be facing a period of uncertainty, and that more work had to be done to conclude a review of Greece's bailout.
"Of course we are worried that there could be a period of uncertainty. One of my colleagues said this is the fourth government that hasn't come from an election," Schaeuble told reporters, adding he was confident those overseeing Italian banks knew what they needed to do.
Schaeuble also said more time was needed to conclude a review of Greece's bailout.
"The second review of the Greek programme appears to need some more time. That's not a complete surprise. Even though there were various expectations which after the experience of the last six years were unrealistic. Greece still has to do a lot to reach the agreed on budgetary goals with sufficient structural and fiscal measures," he said.
Euro zone finance ministers agreed on Monday (December 5) some debt relief for Greece but were divided on reforms it must undertake to reach fiscal targets, leaving it unclear if the International Monetary Fund will join the Greek bailout programme.
Schaeuble was speaking after a meeting of EU finance ministers in Brussels, during which ministers gave their backing to an expanded plan to spur investment and economic growth in the bloc, but they fell short of committing more national funds to the EU Commission-led initiative.
The European Fund for Strategic Investments (EFSI) was launched last year with a target to mobilise 315 billion euros of additional investment in three years, countering a fall in spending after the 2007-08 global financial crisis.
Citing good results, the European Commission, the EU's executive arm, proposed in September to double the plan's financial capacity and duration.
Ministers supported a Commission proposal to extend the plan until 2020 and step up its size to at least 500 billion euros.
"EFSI 2.0 aims to mobilise private and public investment worth 500 billion euros until 2020 and push forward a number of improvements, for instance additional sectors covered including a certain possibility of financing a project related to defence, and security sectors -- it's really something new -- stronger link with our climate commitments as at least 40% of projects should contribute to climate action," the chair of the EU presidency, Peter Kazimir, said after the finance ministers' meeting.
Under the expanded plan, 26 billion euros of EU budget money would be used to guarantee the riskiest parts of investments in energy, transport or telecommunication infrastructures, in a bid to attract private and other public investors. The original plan envisaged the use of 16 billion euros from the EU budget.
The European Investment Bank (EIB), the EU's financial arm, would contribute 7.5 billion euros, up from its current commitment of 5 billion to the EFSI.
The combined 33.5 billion euros of EU cash and guarantees would then be used to attract private investments totalling 500 billion euros, 15 times the original amount.
EU finance ministers agreed to increase the EU budget contribution to the expanded plan, but did not commit to national payments under the scheme.
European Commission President Jean-Claude Juncker had urged them to add national funds to the EFSI so as to increase its financial capacity to 630 billion euros.
The European Parliament will have to approve to plan before it can be applied.
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