MEPs support pilot scheme to issue 'project bonds' for EU infrastructure projects in an effort to boost investment for growth.

Project bonds: the way forward?

When EU leaders met for yet another  crisis summit last week,

much had been made of  a possible bust-up over eurobonds.

Some see mutualisation of sovereign debt  as the last way out of the crisis,

for others it’s the road to perdition.

a more specific type of EU obligation had  actually been agreed on: the 'project bond'.

National and regional budgets  have severe restrictions,

In the banking sector  we have new restrictions.

We have increased  capital requirements on banks

so they cannot give out as many loans  as they did, historically.

That’s the reason  why we need to find new instruments.

The aim is to make large  infrastructure projects more attractive

for big institutional investors  like pension funds.

Due to perceived risks, private investment  in renewable energy projects, for example,

Project bonds offer  more security and flexibility

as the investors can rely  on the EIB and the EU budget.

The model has been a success in America,

but in Europe it's taken two years for the  Member States to agree on the proposal.

There have been many misunderstandings  surrounding project bonds.

Some people thought it'd be like  merging the debts of European states.

Critics say the amount now being made  available for project bonds, €240 million,

is miniscule and will not make a difference.

But the EP points out that  this is a pilot phase,

needed to make sure that everything is  in place for this bond market to grow.

in order to make sure that  if we have a bigger programme,

with more commitment  from the EU budget,