EU leaders are pinning their hopes on an investment bonanza driven by the financial markets to try to dig Europe out of economic stagnation and high unemployment.

Jean-Claude Juncker, the head of the EU executive, won overwhelming support in the parliament in Strasbourg for his first big initiative – a European investment fund seeded with EU budget money and boasting a multiplier effect of 15 to deliver €315bn (£249bn) to pour into strategic infrastructure projects over three years.

“Christmas has come early,” Juncker bragged, presenting the plan to the European parliament. Martin Schulz, the president of the parliament, described what is being dubbed the Juncker plan as a potential “turning point” following years of financial and currency woe and austerity.

Werner Hoyer, the German liberal who heads the Luxembourg-based European Investment Bank (EIB), which takes a key role in the scheme, said the plan represented a “paradigm shift” in how the EU budget was utilised. The plan is a move away from the system of subsidies and grants to a loans-based approach aimed at providing guarantees to private investors who are expected to rush in to fund energy, IT, broadband, transport and research projects.

The policy shift means the EU will effectively gamble part of its budget on much higher-risk projects, taking the first or early losses from bad investments. The EU expects that approach will encourage the private sector to take a punt and reverse the culture of acute risk-aversion and lack of credit crippling Europe.

There is much scepticism whether the Juncker plan will deliver, but senior officials say the scheme has been painstakingly prepared and that this time was different, not least because of record low interest rates and cash-rich investors seeking opportunities but reluctant to put money into Europe.

“We are caught in an investment trap,” said Juncker. “When I talk to investors, they all agree that Europe is an attractive place to invest in. But then I look at the figures, they tell a different story: investment levels in the EU are down to €370bn below the historical pre-crisis norms. While investment is taking off in the US, Europe is lagging behind.

“Why? Because investors lack confidence, credibility and trust. Secondly, because we are confronted with a major paradox: despite the huge liquidity in the world’s money markets and corporate bank accounts, investment in Europe is not rebounding.”

A vehicle called the European Fund for Strategic Investment will be seeded with €21bn from the EU budget, including €5bn from the EIB which is to translate that into more than €60 billion in loans and guarantees. That, in turn, should generate €315bn in investment pledges from the markets.

Getting from €21bn to €315bn represents a leverage ratio of 15, a figure that has triggered criticism that the European Commission has plucked the figures out of thin air.

But Jyrki Katainen, the former Finnish prime minister and commission vice-president in charge of the project, said the €315bn figure was conservative and empirically based. Hoyer said a €10bn capital increase for the EIB in 2012 had translated into an even higher leverage ratio, resulting in €180bn of investment.

The stated aim of the new scheme is to boost growth, create jobs and enhance European competitiveness. Hoyer’s stated EIB success has so far had little effect on these areas.

At Germany’s insistence, there is no new money or borrowing involved in the investment scheme. And, while Juncker appealed to the national governments of the EU to join the package and boost the investment spree, he also said any contributions by member states would be exempted from calculations of public spending and budget deficits – meaning they would not affect the debt and deficit rules of the single currency zone.

“This is the greatest effort in European history to mobilise the EU’s budget to trigger additional investment,” said Juncker. “Europe is back in business. This is not the moment to look back. Investment is about the future. We are offering hope to millions of Europeans disillusioned after years of stagnation. Yes, Europe can still become the epicentre of a major investment drive. Yes, Europe can grow again.

One British diplomat said encouraging private investment and growth-promoting measures were a vital part of securing recovery in the EU economy and ensuring the EU could compete globally. “We will be looking closely at the detailed proposals and will engage with our EU partners in the coming weeks to ensure that plans focus on increasing private investment, improving the business environment and deepening the single market in services, while maintaining our commitment to fiscal discipline.”

National leaders are to examine the scheme before it is signed off at an EU summit next month.

Juncker’s proposals were eagerly embraced by the leaders of the mainstream parties in the parliament, demonstrating how a “grand coalition” of the centre-right and centre–left has gathered behind the Juncker commission against the parliament’s growing band of anti-EU politicians.

Juncker’s first weeks in office have been battered by revelations of how, as prime minister of Luxembourg for almost 20 years, he turned the grand duchy into a paradise for multinationals seeking to minimise their tax bills.

He faces a vote of confidence, called by the anti-EU far right, on Thursday in the parliament over the disclosures. However, the grand coalition on display on Wednesday means he is secure for the time being.