Page 6 - ePaper
P. 6
and the still high levels of indebtedness in parts of the EU economy and their impact on
credit risk. This is confirmed by the latest economic data which show that, contrary to the
U.S., investment has continued to fall in the EU since the crisis (currently 15% lower than in
2007) and it has not rebounded as expected.
In economic terms, this is referred to as "market failure", meaning that market forces alone
cannot provide the solution in the short-term. This is where public authorities have a key
role to play. The Investment Plan provides a comprehensive strategy to bridge this gap,
mobilising private investments alongside public financing.
7. The problem is not the money but the lack of risk-bearing capacity to
finance projects.
The situation is not the same in all Member States, but certain clear patterns can be
recognised everywhere in terms of investment needs that are currently not met:
Our households and companies need to benefit from the latest technologies and
become more energy-efficient.
Our education and innovation systems are less well equipped and less funded than
those of several of our key competitors.
Our welfare systems need substantial modernisation to adapt to the rapid ageing of
our population.
Our energy sector needs to upgrade its networks with the latest technologies,
integrate renewable sources of energy and diversify its sources of supply.
Our transport sector must modernise its infrastructure, reduce congestion and
improve trade connections.
Our environment needs better waste, recycling and water facilities and networks.
And we need far-reaching and faster broadband and smarter data centres across
Europe.
The fact that these sectors have been identified as priority areas does not mean that there
is, necessarily, at this stage a sufficient number of projects that are mature enough to be
financed. Several projects at different stages of development have however already been
identified. As the Report of the joint Task-Force between the European Commission and the
EIB (which is expected to be released shortly) will show, mature projects exist but given their
complex nature, private investors are often unaware of the potential benefits, wary of risk
and therefore reluctant to invest.
8. Europe needs much more: this is a drop in the ocean.
It would be naïve to believe that there is a simple, single answer to fix Europe's investment
problems. The Investment Plan put forward by the Commission is part of a comprehensive
approach to accompany growth and the creation of jobs in Europe by combining structural
reforms, fiscal responsibility and a boost to investment. All national governments must
contribute their fair share. The EU cannot pull it off alone.
5
credit risk. This is confirmed by the latest economic data which show that, contrary to the
U.S., investment has continued to fall in the EU since the crisis (currently 15% lower than in
2007) and it has not rebounded as expected.
In economic terms, this is referred to as "market failure", meaning that market forces alone
cannot provide the solution in the short-term. This is where public authorities have a key
role to play. The Investment Plan provides a comprehensive strategy to bridge this gap,
mobilising private investments alongside public financing.
7. The problem is not the money but the lack of risk-bearing capacity to
finance projects.
The situation is not the same in all Member States, but certain clear patterns can be
recognised everywhere in terms of investment needs that are currently not met:
Our households and companies need to benefit from the latest technologies and
become more energy-efficient.
Our education and innovation systems are less well equipped and less funded than
those of several of our key competitors.
Our welfare systems need substantial modernisation to adapt to the rapid ageing of
our population.
Our energy sector needs to upgrade its networks with the latest technologies,
integrate renewable sources of energy and diversify its sources of supply.
Our transport sector must modernise its infrastructure, reduce congestion and
improve trade connections.
Our environment needs better waste, recycling and water facilities and networks.
And we need far-reaching and faster broadband and smarter data centres across
Europe.
The fact that these sectors have been identified as priority areas does not mean that there
is, necessarily, at this stage a sufficient number of projects that are mature enough to be
financed. Several projects at different stages of development have however already been
identified. As the Report of the joint Task-Force between the European Commission and the
EIB (which is expected to be released shortly) will show, mature projects exist but given their
complex nature, private investors are often unaware of the potential benefits, wary of risk
and therefore reluctant to invest.
8. Europe needs much more: this is a drop in the ocean.
It would be naïve to believe that there is a simple, single answer to fix Europe's investment
problems. The Investment Plan put forward by the Commission is part of a comprehensive
approach to accompany growth and the creation of jobs in Europe by combining structural
reforms, fiscal responsibility and a boost to investment. All national governments must
contribute their fair share. The EU cannot pull it off alone.
5
