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Efsi needs redirecting to fix social problems, think tank finds

The next incarnation of Efsi needs to focus on “developing human and social capital” in less wealthy member states, the European Policy Centre has recommended.

The European Fund for Strategic Investments, which was launched last year, is used to guarantee loans for innovative projects so that banks feel less worried about the risks of investing. It was originally intended to mobilise €315 billion in investment over three years, but now the European Commission plans to extend the fund to mobilise at least €500bn over five years.

But the EPC, a conservative think tank, said in a paper published on 16 November that Efsi needs to be adapted to better serve its purpose. The EPC argued that the guarantees offered by Efsi are not as attractive as initially thought, due to low interest rates in countries where the funds are used the most. In addition, Efsi has mainly operated in countries where capital is easy to access and funding for companies is plentiful, the EPC said.

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