In the movie “Field of Dreams”, Kevin Costner as the lead character hears the cryptic line “if you build it, he will come” in his head. Hearing voices in your head is rarely good, but Costner interprets the sentence as a command to build a baseball field in the middle of an Iowa corn field. He is rewarded for his efforts by the appearance on the field of the ghosts of the 1919 White Sox star players, which to a baseball fan apparently is akin to finding the Holy Grail.

Sometimes going with your convictions against all reason yields unexpected results, as illustrated by Costner’s reward. But Costner is not alone in going with his conviction in order to gain an ephemeral result. Although Jean Claude Juncker is currently better known for his leading role in the never-ending Greek saga, he has also lent his name to a major European growth effort dubbed the “Juncker plan”. In short, the plan aims to boost investment across Europe to the tune of €315 billion. The plan provides €21 billion in public money guarantees to raise the €315 billion from private sources. It will support strategic investments in key areas such as infrastructure, education, research and innovation, as well as risk finance for small businesses. The program builds on the belief that as much as “€1,467 billion could be gained annually from closing gaps in the single market and exploiting its full growth potential and generate more than an additional 11% of EU GDP”. To improve the business environment, the plan will focus on increasing capital to SMEs and long term projects through new financial sector measures. All this is surely needed.

After the financial crisis, austerity has been the name of the game in Europe. Governments have been busy cutting their spending to restore budget balances, while corporates have reduced both their operational and capital expenditures to improve their P&L’s and balances. On top of this, the European banks have been hit by a significant increase in regulatory demands on the capital they are obliged to hold as equity against their lending. Rather than taking the costly road of increasing equity, many banks have instead chosen to reduce their loan portfolios in order to meet requirements. This has led to a negative credit growth in Europe, which makes access to funds for investments more difficult.

The combination of these adverse effects have led to negative investment spending growth in Europe the last few years, making the Keynesian approach of increasing spending that the Juncker Plan epitomizes very welcome. The current forecast of investment in Europe for 2015 and 2016 is a positive growth around 2-4% and as infrastructure spending is a central part of the program, a realization of the Juncker Plan would surely be a positive driver for further investment growth in Europe.

The plan has led a relatively quiet life so far, being overshadowed by other more media-friendly events in Europe. However, the momentum appears to be increasing as support for the plan is secured and the political horse-trading over where and how to invest the funds have now taken front row.

It is thus very near to becoming a reality which is sure to benefit Europe in general, but also manufacturers of heavy machinery who would feel the effects of the increased spending on the growing demand for equipment to realize the infrastructure projects. This would of course benefit the European manufacturers, but also others stand to gain. Currently there are substantial flows of construction equipment from Asia (where some manufacturers also enjoy a favorable currency situation) but also from North America (although with a less favorable strong USD). These flows would likely be boosted by increased European demand on the back of increased investment spending and a more positive sentiment in the European economy.

Growth has been the ever elusive goal of European politicians for the last half decade. Similar to Kevin Costner’s willingness to invest to realize the seemingly impossible result, the Juncker Plan is a case of “build it and growth will come”.