Some European Union states are sceptical about an Italian plan to revive the region's flagging economy by increasing spending on infrastructure, EUsources said today.
Italy, which assumed the EU presidency at the start of July,has championed a proposal that would see the European Investment Bank (EIB) provide the seed corn for futuregrowth by boosting loans for key infrastructure projects.
EU finance ministers, who meet in Brussels on Tuesday, willdiscuss the plan but there are already signs of scepticismfrom some states, particularly about how much private investment will be enticed into the projects, even if the EIB is involved.
Denmark, Finland, and Sweden are in this camp, sourcessaid. Germany also has reservations, they said.
Ms Maria Teresa Armosino, undersecretary in Italy's Economics and Finance Ministry, told reporters this week that Rome's plan would require the EIB to raise an additional €11 billion of infrastructure financing a year until the end of the decade.
The EIB would also play an intermediary or ancillary rolewith the remaining financing, even acting as a loan guarantor.
The increased EIB role combined with private-sectorfinancing could lift the total investment capability to between €35 billion and €70 billion a year, or between 0.5 and 1.0 per cent of total EU gross domestic product, she had said.
But there is scepticism about whether private money willflood in. "It is not clear that the private sector will have the appetite to embark on projects which by their very nature are a public responsibility," one EU source said.