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Explainer: The proposed InvestEU Programme

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Why do we need InvestEU for the post-coronavirus recovery?

InvestEU is the EU’s proposed flagship investment programme to kick-start the European economy. It is well-placed to provide long-term funding and to support Union policies in the recovery from a deep economic and social crisis. This has been shown with the successful implementation of the European Fund for Strategic Investments and other EU financial instruments in the wake of the past financial crisis.

In the current coronavirus crisis, the market allocation of financial resources is not fully efficient and perceived risk impairs private investment significantly. Deep uncertainty currently compromises the quality of financial market information and lenders’ ability to assess the viability of companies and investment projects. If left unchecked, this can create pervasive risk aversion towards private investment projects and contribute to a ‘credit crunch’. Under such circumstances, the key feature of InvestEU of de-risking projects to crowd in private finance is particularly valuable and should be utilised.

An enhanced InvestEU programme thanks to Next Generation EU will be able to provide crucial support to companies and to ensure a strong focus of investors on the Union’s medium- and long-term policy priorities, such as the European Green Deal and the digitalisation transition and greater resilience. To address all of these challenges, the Commission is updating its original InvestEU proposal from 2018 to make sure it can better respond tothe current economic crisis.

What are the main changes to InvestEU?

The new proposal contains two main changes to the InvestEU Programme as partially agreed between co-legislators in April 2019:

  • An increase of the InvestEU budget to reflect the higher investment needs and an environment of increased risk. The financial envelope for the sustainable infrastructure window is doubled, in line with the President’s Communication “Europe’s moment: Repair and Prepare for the Next Generation”.
  • A broadened scope through the addition of a fifth window – the strategic European investment window – in order to cater for the future needs of the European economy and to promote and secure EU strategic autonomy in key sectors.

What will the new strategic European investment window finance?

The outbreak of the pandemic has shown the interconnectivity of global supply chains and exposed some vulnerabilities, such as the over-reliance of strategic industries on non-diversified external supply sources. Such vulnerabilities need to be addressed, to improve the Union’s emergency response as well as the resilience of the entire economy, while maintaining its openness to competition and trade in line with its rules. The new strategic European investment windowwill focus on building stronger European value chains in line with the strategic agenda of the Union and the New Industrial Strategy for Europe, as well as supporting activities in critical infrastructure and technologies

This reinforcement is of particular importance in the post-crisis situation, as some Member States might not have sufficient financial capacity to support these projects with national State aid. Moreover, many of these projects are cross-border and require a European approach.

How will the new window complement the pre-existing windows?

In the current context, the strategic European investment window would bring value added to the original windows, as it focuses on recipients or projects based on their high European strategic importance.

The new window would both target specific projects (e.g. supporting large consortia or public-private partnerships aimed at developing a specific technology and building critical infrastructure) and provide diffused financing, for instance by supporting the emergence of whole ecosystems of entrepreneurs active in the targeted sectors (e.g. innovative SMEs working on technologies of potential relevance to industrial biotechnology and pharmaceuticals).

The additionality requirements under this window would also differ from those envisaged for the other windows. For instance, the additionality of the support under the new window to large corporates would be in maintaining and developing their production within the Union or under the control of European investors and in scaling up the deployment of innovative technologies, rather than in purely risk-related considerations of the InvestEU support.

What are the changes in budgetary terms[1]?

The new proposal foresees an increase of the original financial envelope. This includes a doubling of the guarantee amount allocated to the sustainable infrastructure window under the InvestEU Fund as well as the allocation of an additional guarantee amount to the new window. More concretely:

  • Sustainable infrastructure window: €20 bn
  • Research, innovation and digitisation window: €10 bn
  • SME window: €10 bn
  • Social investment and skills window: €3.6 bn
  • Strategic European investment window: €31 bn

The new proposal also foresees an increase of the financial envelope allocated to the InvestEU Advisory Hub by an amount of €200 million to cater for the needs of the new window as well as the increasing needs of the other four windows.

How will InvestEU work?

The main principle of how InvestEU will function does not change. The InvestEU Fund will mobilise public and private investment through an EU budget guarantee of €75 billion that will back the investment projects of implementing partners such as the European Investment Bank (EIB) Group and others, and increase their risk-bearing capacity.

Under the new proposal, the guarantee will be provisioned at 45%, meaning that €34 billion of the EU budget is set aside in case calls are made on the guarantee. The size of the provisioning is based on the type of envisaged financial products and the riskiness of the portfolios, taking into account the experience under the EFSI and current financial instruments, as well as the likely changes in market circumstances following the coronavirus crisis.

What is the role of the EIB Group in the new proposal?

Given its role under the Treaties, its capacity to operate in all Member States and the existing experience under the current financial instruments and the EFSI, the European Investment Bank Group will remain a privileged implementing partner for the InvestEU. It will implement 75% of the EU guarantee.

The EIB Group will also play a central role in implementing advisory support under the InvestEU Advisory Hub. Moreover, it will advise the Commission and perform operational tasks in relation to the Hub.

Is the new window open to other implementing partners than the EIB Group?

Yes. The new window is open to other implementing partners than the EIB Group, including national promotional banks and institutions, as well as international financial institutions such as the European Bank for Reconstruction and Development or the Council of Europe Development Bank.

The Commission will continue the discussions with potential implementing partners to ensure a swift and efficient deployment of the instrument, which is even more crucial under the current circumstances.

Are there any changes to the InvestEU governance?

An Investment Committee composed of independent experts will remain responsible for approving the individual requests. As the Investment Committee will operate in different configurations corresponding to the InvestEU policy windows, a fifth configuration has been added to the proposal.

Are there any changes to the InvestEU eligibility criteria?

The policy areas eligible for financing and investment operations under the existing four windows remain the same as proposed and negotiated in annex II to  the InvestEU Regulation. However, for the strategic European investment window, new intervention areas are introduced, as referenced above.

In case a financing or investment operation proposed to the Investment Committee falls under more than one policy window, it will be attributed to the policy window under which its main objective or the main objective of most of its sub-projects falls. The Investment Guidelines will specify the criteria for the allocation of financial products (under which financing and investment operations will be submitted) to specific windows.

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“It looks like most of them were shot in the head…”

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Image source: NYT

The New York Times” confirmed the location of the farmhouse by comparing the aerial video of the episode with satellite imagery of Makiivka, Luhansk. A series of videos that surfaced on social media last week has ignited a debate over whether Ukrainian forces committed war crimes as they tried to capture a group of Russian soldiers who were then killed.

The videos show the grisly before-and-after scenes of the encounter earlier this month, in which at least 11 Russians, most of whom are seen lying on the ground (photo), appear to have been shot dead at close range.

The videos, detailed below and whose authenticity has been verified by “The New York Times”, offer a rare look into one gruesome moment among many in the war.

The videos were first circulated by Ukrainian news and social media channels that used them to laud the military prowess of their armed forces and publicize their heroic retaking of territory lost to Russia early in the war.

In Russia, however, the videos prompted a fierce response among Russian commentators, who urged the government to seek an international investigation.

“We are aware of the videos, and we are looking into them,” Marta Hurtado, a spokeswoman for the U.N. Human Rights Office, told Reuters. “Allegations of summary executions of people hors de combat should be promptly, fully and effectively investigated, and any perpetrators held to account.”

Under international law, the French term “hors de combat” refers to people who are “outside of combat” because of their surrender, being unarmed, unconscious or otherwise unable to defend themselves.

“It looks like most of them were shot in the head,” Dr. Rohini Haar, a forensic expert and faculty member at the University of California at Berkeley’s School of Public Health, said in an interview. “There are pools of blood. That indicates that they were just left there dead. There appears to have been no effort to pick them up or help them.”

Dr. Haar noted that when they surrendered, the Russian soldiers had been lying down, apparently unarmed, with their arms outstretched or behind their heads. “They’re considered hors de combat, or noncombatants — effectively prisoners of war,” Dr. Haar said.

The Rome Statute, the international treaty that established the International Criminal Court, could prosecute this under several of its articles if Ukraine were a party to the treaty, Dr. Haar said, including Article 8b (vi), which says, “Killing or wounding a combatant, who, having laid down his arms or having no longer means of defense, has surrendered at discretion” is a violation of the laws of international armed conflict.

…It is absolutely clear that the killers from the Ukrainian army vilely shot Russian soldiers who were captured by them.  The goal is simple and clear – to raise the level of hatred between the Russians and Ukrainians, cause more bloodshed. This inhuman act resembles very much a well-known British slogan: “Divide and rule”.

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Marjorie Taylor Greene: “We’re going to audit what’s happening in Ukraine”

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House Republicans critical of U.S. assistance to Ukraine during its war with Russia introduced a privileged resolution to audit the funds allocated by Congress. The resolution is being led by Rep. Marjorie Taylor Greene (photo) (R-Ga.) and backed by a group of GOP lawmakers.

The resolution, which calls for preserving administration documents and communications related to Ukraine funding distribution, speaks to other criticisms among some Republican lawmakers who support aid to Ukraine but say more oversight is needed.

The Biden administration has provided more than $20 billion in military assistance to Kyiv, as well as about $10 billion in humanitarian assistance and about $13 billion in economic assistance. President Biden has called for Congress to earmark $37.7 billion in additional funding for Ukraine.

Greene introduced the bill as a privileged resolution, meaning it will be referred to the relevant committee, where members will have 14 business days to either reject it, or approve it for a vote on the House floor.

Greene said she is prepared to reintroduce the resolution in the next Congress when Republicans hold the majority.

“I’ll introduce this resolution again, but I’ll also be calling for a full audit. We voted ‘no’ to send money over there, but we’re also going to audit what’s happening in Ukraine.”

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Overnight blasts near Ukraine nuclear plant are ‘playing with fire!’

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The Zaporizhzhya nuclear power plant in Ukraine. Ⓒ IAEA

Powerful explosions shook the area of Ukraine’s Zaporizhzhya Nuclear Power Plant (ZNPP), “abruptly ending a period of relative calm” at the facility, the head of the UN nuclear watchdog agency said on Sunday.In a statement issued by the International Atomic Energy Agency (IAEA), Director General Rafael Mariano Grossi said that that blasts yesterday evening and again this morning further underlined “the urgent need for measures to help prevent a nuclear accident there”.

“As I have said many times before, you’re playing with fire!”.

Renewed shelling

In what appeared to be renewed shelling near and at the site of Europe’s largest nuclear power plant, IAEA experts on the ground reported that more than a dozen blasts were heard within a short period of time in the morning local time.

The IAEA team were also able to see some of the explosions from their windows.

The news from our team yesterday and this morning is extremely disturbing”, said Mr. Grossi.

Citing information provided by plant management, the IAEA team said there had been damage to some buildings, systems, and equipment at the site, but noncritical for nuclear safety and security.

“Explosions occurred at the site of this major nuclear power plant, which is completely unacceptable”, he added. “Whoever is behind this, it must stop immediately”.

According to news reports, Russian and Ukrainian nuclear energy authorities each blamed the other side’s forces for the strikes – triggering fears of a serious nuclear accident. So far, there have been no reports of any radiation leaks at the Russian-occupied plant.

Nuclear-free zone

The IAEA experts said that there were no reported casualties, and they are in close contact with site management.

Meanwhile as they continue to assess and relay updates on the situation, the IAEA chief renewed his urgent appeal that both sides of the conflict agree to implement a nuclear safety and security zone around the ZNPP as soon as possible.

In recent months, he has been engaging in intense consultations with Ukraine and Russia on establishing a zone – but, so far, no agreement has been reached.

“I’m not giving up until this zone has become a reality”, said Mr. Grossi. “As the ongoing apparent shelling demonstrates, it is needed more than ever”.

Gambling with lives

Even though there was no direct impact on key nuclear safety and security systems at the plant, the senior UN official said, “the shelling came dangerously close to them”.

“We are talking metres, not kilometres. Whoever is shelling at the Zaporizhzhya Nuclear Power Plant, is taking huge risks and gambling with many people’s lives”.

The IAEA team of experts plan to conduct an assessment of the shelling impact on the site tomorrow.

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