The project bond initiative is about boosting project investment by offering public guarantees for private investments. Intrinsically, it follows that the ‘success’ of the instrument in raising funds will depend on the amount of risk transferred. But the financial crisis has shown us definitively that public guarantees for private debt are not ‘free’. Ultimately taxpayers from the 27 EU Member States will pick up the bill when things go wrong.
We are surprised and concerned that this fundamental issue is not explicitly dealt with in the consultation document, let alone strategies for mitigating it. This suggests the Commission is pursuing a predetermined political agenda, instead of properly weighing the pros and cons of a policy option on its own merits.
Read more from our consultation response