Coulter, S., (2013), “Investing in Europe’s physical and knowledge infrastructure”, Policy Network, 21 Οκτωβρίου.
Europe would benefit from extra investment in both its physical and knowledge infrastructure – the two are necessities, not alternatives. But what are the political choices and impediments to an EU investment and growth agenda?
With Europe’s debt crisis receding for the moment and the economic numbers slowly ticking up, heads are beginning to lift up from bare-knuckle crisis management to look at what comes next. Some interesting new ideas are coming onto the table about how to use the current lull in the storm to act to make any recovery sustainable and re-equip Europe’s economy for the future. This essay examines recent proposals to shock Europe out of its torpor by embarking on a massive programme of infrastructure investment, financed by public and private capital. However, the essay argues that a better strategy would be to combine a well-targeted programme of capital spending with greater investment in human and social capital, along with smarter industrial policy to foster hi-tech firms in growth industries.
The attractions of ramping up infrastructure spending in a low-growth situation are obvious. By mobilising dormant private sector resources through public guarantees the European Commission and European Investment Bank (EIB) together could turbo-boost investment spending, which has flagged at both the EU and national level since the crisis. Depending on the sums involved and how well capital is deployed, a major investment programme could have two positive effects. First, the boost to activity would lift growth and employment across the continent. Second, investing in Europe’s creaking infrastructure could eventually pay for itself through raising total factor productivity (TFP).
Σχετικές Αναρτήσεις
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- Featherstone, Kevin, (2011), ‘The Greek Sovereign Debt Crisis and EMU: A Failing State in a Skewed Regime’, Journal of Common Market Studies, Vol. 49, Issue 2, p.p. 193–217.
- Ζachmann, George, (2012), ‘Smart choices for growth’, Bruegel, 28 Νοεμβρίου.