A European Public Investment Outlook

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Preface				ix
Franco Bassanini, Alberto Quadrio Curzio, and Xavier Ragot

Acknowledgements				xiii
Author Biographies				xv

Introduction				1
Floriana Cerniglia and Francesco Saraceno
	References			12


Part I — Outlook				15

1.	Europe Needs More Public Investment			17
	Rocco Luigi Bubbico,Philipp-Bastian Brutscher and Debora Revoltella
	1.1.	Recent Public Investment Trends in Europe		18
	1.2.	Infrastructure Has Declined Substantially		22
	1.3.	How to Support More Infrastructure Investment		28
	1.4.	Policy Implications		28
	References			30

2.	Public Investment and Capital in France			33
	Mathieu Plane and Francesco Saraceno
	Introduction			33
	2.1.	The Net Wealth of Public Administrations		35
	2.2.	Evolution of Public Non-Financial Assets		36
		2.2.1.	The value of fixed assets remained constant	38
	2.3.	The Dynamics of Gross Investment		39
	2.4.	Net Flows of Fixed Assets Give Another (and Different) Picture		40
		2.4.1.	Since 2009, debt has not been used to finance an accumulation of assets	42
	2.5.	Assessing the Impact of an Investment Push in France		44
		2.5.1.	A quantification of investment needs for France	44
		2.5.2.	The macroeconomic impact of an investment shock	45
	2.6	Conclusion		46
	References			48

3.	Public Investment in Germany: The Need for a Big Push			49
	Sebastian Dullien, Ekaterina Jürgens and Sebastian Watzka
	Introduction			49
	3.1.	The German Public Capital Stock		49
	3.2.	Quantifying Investment Needs		53
	3.3.	Macroeconomic Implications of a Public Investment Program in Germany		57
	Conclusion			60
	References			60

4.	Public Investment Trends across Levels of Government in Italy			63
	Floriana Cerniglia and Federica Rossi
	Introduction			63
	4.1.	Public Investment in Italy		65
		4.1.1.	Public investments across regions	72
	4.2.	2018, 2019 and 2020 Budgets: The Financial Resources for Public Investments		75
	4.3.	Conclusions and Some Policy Prescriptions		77
	References			79

5.	Trends and Patterns in Public Investment in Spain: A Medium- and Long-Run Perspective			83
	José Villaverde and Adolfo Maza
	Introduction			83
	5.1.	Trends and Patterns of Public Investment in Spain in the EU Context, 2000–2017		84
	5.2.	Public Investment and Public Capital in Spain: A Long-Term Perspective		88
	5.3.	Conclusions		93
	References			95


Part II — Challenges				97

6.	In Search of a Strategy for Public Investment in Research and Innovation			99
	Daniela Palma, Alberto Silvani and Alessandra Maria Stilo
	Introduction and Main Points at Issue			99
	6.1.	The EU in Depth		101
	6.2.	Public Investment		105
	6.3.	Final Remarks and Policy Considerations		109
	References			112

7.	Social Investment and Infrastructure			115
	Anton Hemerijck,Mariana Mazzucato and Edoardo Reviglio
	Introduction: The Welfare Lesson from the Great Recession			115
	7.1.	The Social Investment Life-Course Multiplier Effect		117
	7.2.	A Golden Social Investment Rule in the Stability and Growth Pact		118
	7.3.	A New Deal for Social Europe: Boosting Social Infrastructure		119
	7.4.	How to Invest in Social Infrastructure to Fill the Gap? The Creation of a European Fund for Social Infrastructure		121
	7.5.	Firms or Markets in Infrastructure Financing		123
	7.6.	The Role of State Investment Banks (SIBs) in Financing Social Infrastructure in the European Union		124
	7.7.	The Concept of “Public Value” and the Role of Social Action		125
	7.8.	How Social Investment and Social Infrastructure is Part of Public Value		126
	7.9.	The Need for Mission-Oriented State Investment Banks		127
	7.10.	Closing Remarks		129
	References			130

8.	From Trans-European (Ten-T) to Trans-Global (Twn-T) Transport Infrastructure Networks. A Conceptual Framework			135
	Paolo Costa, Hercules Haralambides and Roberto Roson
	8.1.	The Trans-European Transport Network and its Evolution (1996–2013)		135
	8.2.	Demand for New Connectivity: Europe’s Economic, Social and Political Integration in a Global Context		140
		8.2.1.	The growing importance of the extra-EU markets	141
		8.2.2.	Asia’s central role in the global economy and trade	144
		8.2.3.	The potential of “MENA (Middle East and North Africa) shores” and the Mediterranean Sea basin	145
		8.2.4.	The shift of the European economy’s centre of gravity to the East	145
		8.2.5.	Consequences for the EU transport infrastructure policy	146
	8.3.	Dealing with the Disruption of the Worldwide Maritime Freight Transport Network and its Infrastructure		148
	8.4.	Dovetailing the EU Ten-T Infrastructure Policy with the Chinese Belt and Road Initiative (BRI)		152
	8.5.	Assessing the Systemic Impact of Transport Infrastructure: Some Novel Analytical Tools and Approaches		155
	8.6.	Some Concluding Remarks		157
	References			158

9.	Ecological Transition			161
	D’Maris Coffman, Roberto Cardinale, Jing Meng and Zhifu Mi
	Introduction			161
	9.1.	The Importance of Carbon Accounting		163
	9.2.	The Emergence of “ESG” ratings		164
	9.3.	Mitigation: Decarbonization of Energy and Transport		165
		9.3.1.	Energy	165
		9.3.2.	Transport	167
	9.4.	Adaptation: Physical and Social Infrastructure		168
	9.5.	Remediation: Negative Emissions Technologies and Climate Engineering		168
	9.6.	Conclusions and Recommendations		169
	References			170

10.	The Contribution of European Cohesion Policy to Public Investment			175
	Francesco Prota,Gianfranco Viesti and Mauro Bux
	Introduction			176
	10.1.	European Cohesion Policy: An Overview		176
	10.2.	The Geography of ERDF and CF Expenditures		178
	10.3.	The Impact of Cohesion Policy on Public Investment		181
	10.4.	Regional Convergence and Spillovers		187
	10.5.	Summary and Conclusions		189
	References			190

List of Illustrations				193
List of Tables				197

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