The European Commission is set to introduce a €315 investment plan that is based on guarantees, and a small amount of seed money. The Union is hoping to do enough to entice private investors back into the European market.

The European Investment Bank (EIB) will payout €5 billion in start-up funding, and the European Commission will offer €16 billion in guarantees to absorb some of the risk associated with new projects.

The Commission's President Jean-Claude Juncker commented that: "Europe needs a kick-start and today the Commission is applying the jump leads."

The programme will be called the European Fund for Strategic Investments, and could be up and running by the middle of 2015. The start-up fund is expected to have an economic impact that is 15 times the size of the initial investment.

Investment in the EU has fallen by a massive €430 billion over the last six years - Ireland, Greece, Spain, Portugal and Italy accounted for most of this drop. Failure to convince private investors to put money into the European economy has been one of the main problems that has delayed economic recovery across the continent. 

The European Union estimates that this €21 billion will allow the EIB to raise €60 billion by issuing new bonds.

It remains to be seen if the €21 billion fund will be enough to encourage private investors to come back into the market. Measures like this have been tried and have failed in the past. The scheme is thought to be part of a broader strategy which will see other European institutions, including the European Central Bank, taking action to stimulate the European economy.