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The Great Reset: 2021 European Public Investment Outlook

The Great Reset: 2021 European Public Investment Outlook Floriana Cerniglia, Francesco Saraceno, and Andrew Watt (eds)
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This timely and insightful collection of essays written by economists from a range of academic and policy institutes explores the subject of public investment through two avenues. The first examines public investment trends and needs in Europe, addressing the initiatives taken by European governments to tackle the COVID-19 recession and to rebuild their economies. The second identifies key domains where European public investment is needed to build a more sustainable Europe, from climate change to human capital formation.

Building on the 2020 edition, The Great Reset demonstrates the value of public capital both within European countries and as a European public good, shedding light on the impact that the NextGenerationEU’s Recovery and Resilience Facility will likely have on the macroeconomic structure of the European economy. The first part of the Outlook assesses the state of public investment in Europe at large, as well as focusing on five countries (France, Germany, Italy, Poland and Spain) as case studies. The second part focuses on the challenges posed by the pandemic and the pillars of the NextGenerationEU investment plan, with chapters ranging from education and digitalization, to territorial cohesion and green transition.

This book is a must-read for economists, policymakers, and scholars interested in the impact and recovery of European countries during a time of extensive uncertainty.



The Great Reset: 2021 European Public Investment Outlook
Floriana Cerniglia, Francesco Saraceno, and Andrew Watt (eds) | December 2021
Open Reports Series, vol. 10 | ISSN: 2399-6668 (Print); 2399-6676 (Online)
258 pp. | 67 colour illustrations | 7" x 10" in (254 x 178 mm)
ISBN Paperback: 9781800643505
ISBN Hardback: 9781800643512
ISBN Digital (PDF): 9781800643529
ISBN Digital ebook (epub): 9781800643536
ISBN Digital ebook (mobi): 9781800643543
ISBN Digital (XML): 9781800643550
DOI:10.11647/OBP.0280
Categories: BIC: KFFM (Investment and securities), K (Economics, finance, business and management), 1QFE (European Union); BISAC: BUS036000 (BUSINESS & ECONOMICS / Investments & Securities / General), BUS032000 (BUSINESS & ECONOMICS / Infrastructure), BUS051000 (BUSINESS & ECONOMICS / Public Finance).


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Contents

Acknowledgements

Authors’ Biographies

Preface Download
Franco Bassanini, Sebastian Dullien, Alberto Quadrio Curzio and Xavier Ragot

Introduction Download
Floriana Cerniglia, Francesco Saraceno and Andrew Watt

References

Part I-Outlook

1. Public Investment in the Pandemic—Europe at a Glance Download
Andrea Brasili, Atanas Kolev, Debora Revoltella and Jochen Schanz

2. From Fiscal Consolidation to the Plan de relance: Investment Trends in France Download
Mathieu Plane and Francesco Saraceno

3. Public Investment in Germany: Much More Needs to Be Done Download
Katja Rietzler and Andrew Watt

4. Relaunching Public Investment in Italy Download
Giovanni Barbieri and Floriana Cerniglia

5. Public Investment in Poland Download
Adam Czerniak and Sebastian Płóciennik

6. Trends and Patterns in Public Investment in Spain: An Update Download
José Villaverde and Adolfo Maza

PART II-Challenges

7. Crowding In-Out of Public Investment Download
Luigi Durand, Raphael Espinoza, William Gbohoui and Mouhamadou Sy

8. Investing in Health Download
Pierre-Yves Geoffard

9. Education, Human Capital, and Social Cohesion Download
Lieve Fransen, Romano Prodi and Edoardo Reviglio

10. COVID-19 and the Corporate Digital Divide Download
Désirée Rückert, Reinhilde Veugelers, Antilia Virginie and Christoph Weiss

11. EU Investment in Energy Supply for Europe Download
Carlo Jaeger, Diana Mangalagiu and Jonas Teitge

12. Environmental Impact Evaluation of a European High-Speed Railway Network along the "European Silk Road” Download
Maximilian Zangl, Katharina Weber, Muhammad Usman Zahid and Mario Holzner

13. Cohesion Policy and Public Investment in the EU Download
Giuseppe Coco and Raffaele Lagravinese

List of Tables

List of Illustrations

Giovanni Barbieri is a Research Fellow at Cranec (Centro di ricerche in analisi economica e sviluppo economico internazionale) at Università Cattolica del Sacro Cuore. He holds a PhD (2017) in Institutions and Policies. He previously worked as Adjunct Professor of History of International and Commercial Institutions at the University of Palermo (D.E.M.S., Italy) and project researcher in the Kone Foundation Project "Regional Challenges to Multilateralism”, based at Tampere University, Finland. His main expertise is in international political economy (IPE), in particular the problem of uneven deveolopment and the new challenges posed by rising countries to the current global governance scheme.

Andrea Brasili is a Senior Economist at the EIB (Luxembourg) where his research interests are both micro (firm level) data analysis and macroeconomic developments, in particular those related to fiscal policy. He received his PhD in Public Economics from the University of Pavia (Italy). Before joining the EIB, he worked in the private sector (in Italian banks and asset management companies) as a research economist, still collaborating with academia.

Floriana Cerniglia is a Full Professor of Economics at Università Cattolica del Sacro Cuore (Milan) and Director of CRANEC (Centro di ricerche in analisi economica e sviluppo economico internazionale) She is the Co-Editor-in-Chief of EconomiaPolitica, Journal of Analytical and Institutional Economics. She received her PhD from the University of Warwick (UK) and her research interests are in Public Economics and in macroeconomic policies. She has published in leading international journals and she has coordinated and participated in a number of peer-reviewed research projects.

Giuseppe Coco (PhD, Exeter, MSc York, BSc Firenze) holds the Chair in Economics at the School of Political Science ‘Cesare Alfieri’ in Firenze, where he has been the Director of the Master in International Relations. He is Advisor to the Fondo Nazionale Innovazione, a member of the Scientific Committee of the ‘Corte dei Conti’ Alta Scuola di Formazione, and a member of the Scientific Commitee of the ASTRID Foundation. He has previously held the positions of Head Economic Advisor to the Minister for the Mezzogiorno (2016–18) and Vice Prime Minister (2015–16); Visiting Research Fellow at City University, London (2009–11); Member of the Simplification Unit (2004–09), and Senior Economist in the Prime Minister’s Office in Italy (1999–02); and Lecturer in Economics at the University of Exeter, UK (1997–99). He edited two recent volumes on the development of the Mezzogiorno with Laterza and Il Mulino. His research has also been published in the Journal of Banking and Finance, the Journal of Money, Credit, and Banking, and the European Economic Review.

Adam Czerniak is Director for Research and Chief Economist at Polityka Insight and Head of the Institutional and Political Economics Department at the Warsaw School of Economics. He holds a PhD in Economics. Until 2012, he worked as a banking economist. Previously, he cooperated with the World Bank and the FOR Foundation; he was also a Ronald Coase Institute scholarship fellow. He authored dozens of publications in the fields of economic sociology and institutional economics, and on the varieties of residential capitalism within the European Union. He is the Polish representative to the European Master in Official Statistics Board (term 2021–23).

Luigi Durand is currently a Senior Economist in the Monetary Policy Division of the Central Bank of Chile. His research interests are in international macroeconomics with a focus on capital account policies. His previous work experiences include the IMF, the Independent Evaluation Office of the IMF, and the ECB. Luigi received his PhD in Economics from Johns Hopkins University in 2020. He also holds a MA in Economics from Johns Hopkins University and an MSc in Economic and Social Sciences from Bocconi University.

Raphael Espinoza is a Deputy Division Chief at the IMF, where he has worked on a variety of countries, including the UK during the Brexit negotiations, Spain during the euro area crisis, and the Dominican Republic during its 2009–10 IMF programme. He has also been a Lecturer (Assistant Professor) in Economics at University College London (UCL), where he was the Director of the Centre for Studies of Emerging Economies and a financial stability expert for the central banks of Peru and Colombia. He previously worked on the US subprime crisis as an economist for the ECB. He has written extensively on fiscal policy, monetary policy, and financial stability, including in two books published by Oxford University Press.

Lieve Fransen has been a Senior social and health policy Advisor for a range of different institutions, businesses, and think tanks since 2015. She recently organised major events on implementing the SDGs with private sector and is one of the co-authors of the ground-breaking Prodi report on investing in social infrastructure. She is a medical doctor specialising in global public health and social policies worldwide. She has a PhD in social policies from Antwerp and is the author of many scientific and policy publications. Dr Fransen has had a distinguished career which includes roles as Public Health Advisor to the Ministry of Health in several countries and Director for Social Policy for the European strategy for 2020 and the European semester in the European Commission until May 2015. She launched the Social Investment Package and the recommendation for investing in children in 2013, and has previously been a member of the G8 social impact investment task force and social innovation in the EU. Dr Fransen has considerable recognised experience in external relations and European policies and institutions, and worked extensively with the UN and the World Bank, as well as with private sector entities and investors. She has previously been the founder of the Global Fund for aids, malaria, and tuberculosis, and was the chair of the board representing the donors. She is now a well-recognised policy maker at senior management /director level in the EU in different departments of the European Commission, including Development, Trade and External Relations, Communication and Political Reporting, and Social Affairs and Employment.

William Gbohoui is an Economist at the International Monetary Fund, where he has worked on several countries including Burkina-Faso, France, Indonesia, and Luxembourg. He holds a PhD in Macroeconomics and Public Economics from the University of Montreal, where he has also been a Lecturer. He has written research papers on a wide range of topics covering quantitative macroeconomics, public finance, fiscal policy, inequality, and the labour market in the euro area. He has also contributed to books on economic integration and trade, published by the International Monetary Fund and Palgrave Macmillan.

Pierre-Yves Geoffard is a Professor at the Paris School of Economics, directeur d’études at EHESS, and directeur de recherche at CNRS. His academic work focuses on the economic analysis of health and healthcare systems, health policy, and socioeconomic inequalities in health. His most recent book to be published (with Jean-Pierre Couteron, Jean-Felix Savary, and Yann Bisiou) is En finir avec la guerre aux drogues (Esprit Frappeur, 2021).

Mario Holzner is an Executive Director at wiiw. He also coordinates economic policy development and communication with a focus on European economic policy. He has recently worked on issues of infrastructure investment in greater Europe, proposing a European Silk Road. He is also a Lecturer in Applied Econometrics at the University of Vienna, Department of Economics. He obtained his PhD in Economics at the Vienna University of Economics and Business in 2005.

Carlo C. Jaeger is Co-Founder and Chairman of the Global Climate Forum, leading GCF’s Green Growth research process. He holds a Professorship at Beijing Normal University (BNU) and was Professor for Modelling Social Systems at Potsdam University in Germany and chair of the research domain ‘Transdisciplinary Concepts and Methods’ at the Potsdam Institute for Climate Impact Research.

Atanas Kolev is Principal Advisor at the Economics Department of the EIB. He has worked on a wide range of topics related to investment and investment financing at the firm-, sector-, and economy-wide levels. He has been an organiser and contributor to the annual economics conference of the EIB on topics like economic and social cohesion, investment in the energy sector, adaptation to climate change, public investment, and infrastructure investment. Atanas Kolev is currently a coordinator, reviewer, and economic editor of the EIB annual investment report. He holds an Economics PhD from Universitat Autònoma de Barcelona.

Raffaele Lagravinese is a Senior Lecturer of Economics at the University of Bari (Italy). He holds a PhD in Economics from the University of Bari (2011) and a Master’s Degree in Economics from the University of Roma Tre (2007). His main expertise is in the areas of Urban and Regional Economics, Health Economics, and Economics of Education. In the past, he has been a Visiting Scholar at the University of York (2009–10), the University of Cambridge (2013), and London School of Economics (2016). In 2016 he became was Adjunct Professor at Brunel Business School of London.

Diana Mangalagiu is a Professor at Neoma Business School, France and the Environmental Change Institute, University of Oxford, and Adjunct Professor at Sciences Po. She has a dual background in natural sciences (PhD in Artificial Intelligence, Ecole Polytechnique, MSc Physics) and social sciences (MSc Sociology, MSc Management). She has over two decades of research, teaching, and advising experience in sustainability, long-term planning, risk governance, and articulation of environmental and economic policies in corporate and public policy settings, addressed through modelling, stakeholder-based inquiry, and foresight approaches. She authored numerous scientific articles and books in fundamental and applied areas, co-founded the Initiative for Science, Society and Policy Dialogue and co-chaired the pan-European Environmental Outlook of the UNEP. She is a scientific board member of the Integrated Risk Governance Project, SEI Initiative on Governing Bioeconomy, and expert for IPBES. She leads advisory, research, and development projects with national and regional governments, companies and World Banks, and OECD and UN agencies.

Adolfo Maza is an Associate Professor of Economics (Accredited as Full Professor) at the University of Cantabria. Prof. Maza received his PhD degree in Economics in 2002. Later on, he completed a postdoctoral stay at the University of Berkeley. His main areas of research include regional economics, economic integration and globalisation, the labour market, migration, and energy economics. He has published more than seventy papers in various international scientific journals, most of them included in the Journal Citation Report (JCR) database. He has also participated in quite a few international congresses and meetings. He was awarded the "Young Researchers Prize” by the Spanish Regional Science Association. He is the Coordinator in Spain of the Erasmus Mundus Joint Master in Economics of Globalisation and European Integration (EGEI). Finally, he has acted as a reviewer for numerous scientific journals, as well as for international funding agencies such as the National Science Foundation (USA), the Austrian Science Fund, and the Czech Science Foundation.

Mathieu Plane is a Deputy Director of the Analysis and Forecasting Department at the OFCE Research Center in Economics, Sciences Po, Paris. He is in charge of economic forecasts for the French economy and works on economic policy issues. He has written several articles in scientific journals and has participated in several reports for public institutions. He teaches at Sciences Po, Paris and at the University of Paris Pantheon-Sorbonne. He was, in 2013–14, economic advisor to the Ministers of Economy, Industry, and the Digital Sector. He speaks and writes regularly in the media. He has recently published, in collaboration with other authors of the OFCE, Margin Rate and Investment in the Export Sector: A Comparative Analysis between France and Germany, The Wave of Recovery: Economic Outlook for the French Economy 2021-2022, and French Economy 2022 by Éditions La Découverte, Repères collection.

Sebastian Płóciennik is Professor of Economics at Vistula University. He received his PhD from the University of Economics in Wroclaw. In 2013–21 he was head of the European Union Programme and the Weimar Triangle Programme at the Polish Institute of International Affairs (PISM) and in 2003–09, researcher at the Willy Brandt Centre for German and European Studies in Wroclaw. Between 2015–17 he was Co-Chairman of the Board of the Foundation for Polish-German Cooperation (FWPN). His research focuses on the German economy and economic integration in Europe, as well as types of capitalism. He has lectured at the University of Wrocław, ABiF Vistula, and universities in Germany, USA, South Africa, Canada, South Korea, and India.

Romano Prodi was born in 1939. He is a Full Professor of Industrial Economics at Bologna University. From November 1978 to March 1979, he was Minister of Industry. From November 1982 to October 1989 and from May 1993 to July 1994, he held the position of Chairman of the Institute for Industrial Reconstruction (IRI). From 1996–98 and from 2006–08, he was the Italian Prime Minister. From 1999–2005, he was President of the European Commission. He was Chairman of the UN-African Union High-Level Panel for Peacekeeping in Africa from July 2008–10, and was Special Envoy of the Secretary-General for the Sahel from October 2012 to January 2014. From 2009–13, he was Professor at Large at Brown University, and from 2010–15, Professor at CEIBS (China Europe International Business School) in Shanghai. He is now President of the Foundation for Worldwide Cooperation.

Edoardo Reviglio is Head of International and European Projects at "Cassa depositi e prestiti” (CDP), Rome. He is an Adjunct Professor of Economics at LUISS Guido Carli in Rome, and President and Faculty Member of the International University College of Turin. He has previously been a member of the Council of Economic Advisers of the Italian Ministry of Economy and Finance. He is one of the co-authors and chairmen of the Working Group on Finance of the Prodi report on investing in social infrastructure. He has considerable recognised experience in academic and policy research, and represents CDP in international institutions (UN, G20, G7, OECD, EU), working extensively with them. He is on the Board and Scientific Committee of several think tanks at national and international level. He received his BA, Summa Cum Laude, from Yale College, was Senior Fellow at the Department of Mathematics of Yale University, and was Research Associate at the Department of Mathematics of Imperial College, University of London. He is the author of many scientific and policy publications. His fields of interest include public finance, banking and finance, law and economics, and economic history.

Debora Revoltella has been Director of the Economics Department of the European Investment Bank since April 2011. The department comprises thirty economists and provides economic analysis and studies to support the bank in defining its policies and strategies. Before joining the EIB, Debora worked for many years on CESEE, was first in the research department in COMIT, and later worked as Chief Economist for CESEE in UniCredit. Debora holds a PhD in Economics and has also worked as Adjunct Professor at Bocconi University. She is a member of the Steering Committees of the Vienna Initiative and the CompNet, an alternate member of the Board of the Joint Vienna Institute and a member of the Boards of the SUERF and the Euro 50 Group.

Katja Rietzler is Head of the Unit of Fiscal Policy at the Macroeconomic Policy Institute (IMK), part of the Hans-Böckler Foundation. She holds a PhD from the Freie Universität, Berlin. Among other topics, her research focuses on fiscal issues of the municipalities, the German tax-system, public investment needs, and fiscal rules. In addition, she is responsible for the IMK’s macroeconometric model. As an expert she regularly participates in parliamentary hearings on issues such as tax legislation, annual budgets, or the debt brake and its implementation.

Désirée Rückert is an Economist in the Economics Department of the European Investment Bank, where she is involved in the EIB Investment Survey, a large-scale survey of corporate investment activities. Her research interests are in digitalisation, start-ups, and applied public economics. She holds a PhD in Economics from Cologne University.

Francesco Saraceno is a Deputy Department Director at OFCE, the Research Center in Economics, Sciences Po, Paris. He holds PhDs in Economics from Columbia University and the Sapienza University of Rome. His research focuses on the relationship between inequality, macroeconomic performance, and European macroeconomic policies. He has published in several international journals. In 2000–02 he was a member of the Council of Economic Advisors for the Italian Prime Minister’s Office. He teaches international and European macroeconomics at Sciences Po, where he manages the Economics concentration of the Master in European Affairs, and in Rome (Luiss). He is Academic Director of the Sciences Po-Northwestern European Affairs Program. He is a member of the Scientific Board for the LUISS School of European Political Economy and formerly of the Confindustria’s Scientific Committee. He advises the International Labour Organization (ILO) on macroeconomic policies for employment and participates to IMF training programs on fiscal policy.

Jochen Schanz is a Senior Economist at the European Investment Bank. After a PhD in game theory at the European University Institute, he worked at Lehman Brothers, the Bank of England, and the Bank for International Settlements on monetary and financial stability. At the European Investment Bank, he focuses on public investment and human capital.

Mouhamadou Sy is an Economist at the International Monetary Fund. Prior to the IMF, Mr. Sy worked at the Office of the President and at the Macroeconomics Policy and Research Department of the African Development Bank (AfDB). Before joining the AfDB, he worked at the French Prime Minister’s Economic Policy Planning Office in Paris with a focus on international macroeconomic issues. His work to date in policy publications and peer-reviewed journals covers a wide range of topics related to international finance, macroeconomics, and public finance. He holds a PhD from the Paris School of Economics which won him the prize for the best thesis on "Monetary, Financial and Banking Economics”, awarded by the Banque de France Foundation jointly with the French Economic Association. He also holds a BSc in Econometrics from the University Paris XII.

Jonas Teitge is a Researcher at the Global Climate Forum, where he is part of the Green Growth research process. He obtained a Diploma in Economics from the University of Potsdam with a focus on Econometrics, Quantitative Methods, and Macroeconomic Modelling in 2011, and joined the Global Climate Forum directly after. The focus of his research is centred around the impact of climate policy measures on economics in general, and the prospects of the European Green Deal in particular. To study those questions, he has specialised in agent-based computational modelling and is designing and calibrating economic models that also take the impact on the climate from environment resource carbon emissions into account.

Reinhilde Veugelers is a Full Professor at KULeuven (BE) at the Department of Management, Strategy and Innovation. She has been a Senior Fellow at Bruegel since 2009 and a Senior Non-Resident Fellow at the Peterson Institute for International Economics since 2020. She is also a CEPR Research Fellow, a member of the Royal Flemish Academy of Belgium for Sciences, and a member of the Academia Europeana. From 2004–08, she was on academic leave, as advisor at the European Commission (BEPA Bureau of European Policy Analysis). She served on the ERC Scientific Council from 2012–18 and on the EU-RISE Expert Group advising the Commissioner for Research. She is a member of VARIO, the expert group advising the Flemish minister for Innovation. She is currently a member of the Board of Reviewing Editors of the journal Science and a co-PI on the Science of Science Funding Initiative at NBER.

José Villaverde is a Full Professor of Economics (University of Cantabria). He received his PhD degree in Economics from the University of País Vasco. He has been a Visiting Professor at many universities in Denmark, England, Taiwan, China, United States, Belgium, Chile, Poland, Czech Republic, Ecuador, and Argentina. The scope of his current research interests encompasses international and regional economics, economic integration and globalisation, and the labour market. He has authored several books and published more than 150 papers in refereed journals. He has also participated in many international congresses and meetings. He has acted as a consultant for the World Bank and the European Commission. He has also served as a reviewer for numerous scientific journals in the field of economics.

Antilia Virginie is a Research Assistant at the European Central Bank. She received her MSc in Economics from University College London and has previously worked in the Economic Studies division of the European Investment Bank.

Andrew Watt is Head of the European Economic Policy Unit at the Macroeconomic Policy Institute (IMK), part of the Hans-Böckler Foundation. He holds a PhD from the University of Hamburg. His main research fields are European economic and employment policy and comparative political economy, with a particular interest in the interaction between wage-setting and macroeconomic policy. Recent work has focused on reform of the economic governance of the euro area, emphasising the need to coordinate monetary, fiscal, and wage policy in order to achieve balanced growth and favourable employment outcomes. He has served as advisor to numerous European and national institutions, including the European Commission, the European Economic and Social Committee, and Eurofound.

Katharina Weber is a Research Assistant at the School of Public Policy of the Central European University (CEU). She holds a degree in law (LLB) and is currently pursuing her Master’s degree in Public Policy. Her research interests include economic and environmental sustainability with a focus on circular economy and adaptation aid for climate change.

Christoph Weiss is a Senior Economist in the Economics Department of the European Investment Bank. He received a PhD in Economics from the European University Institute. His research interests include firm dynamics, labour economics, development economics, and applied microeconometrics.

Muhammad Usman Zahid is an international development practitioner currently engaged as a project manager with the Centre for Economic Research in Pakistan. Trained in public policy, international development, and economics, he received his Master’s from the School of Public Policy at the Central European University. His Master’s thesis focused on the use of evidence in policy learning, with a focus on political economy of the policy-making process. Usman’s research interests encompass political economy, development, and governance. Up until 2021, Usman worked with the World Bank to improve agriculture extension services and productivity in Pakistan, while previously he has been engaged with the Government of Pakistan in the health and education domains, implementing projects that have aimed at improving access to public health as well as increasing educational outcomes in public schools in the Punjab province.

Maximilian Zangl holds a Master’s Degree in Public Policy from the Central European University. His background is in International Relations and Management, while his research interests focus on environmental and governance policies. He has been a research assistant at Webster Vienna Private University.


Deutschland muss klotzen, 19/2021 · Seite 5. Katja Rietzler, Andrew Watt: Public Investment in Germany: Much More Needs to Be Done, in: Floriana Cerniglio, Francesco Saraceno, Andrew Watt (Hrsg.): The Great Reset, European Public Investment Outlook 2021, Cambridge, Open Book Publishers, November 2021
Investieren für den Neustart, 19/2021 · Seite 5. Andrea Brasili u.a.: Public Investment in the Pandemic – Europe at a Glance, in: Floriana Cerniglio, Francesco Saraceno, Andrew Watt (Hrsg.): The Great Reset, European Public Investment Outlook 2021, Cambridge, Open Book Publishers, November 2021


When if not now should Europe turn up the volume on government investment in order to deliver a just transition to a sustainable economy as well as resilient public services to all? This volume explains the rationale behind such policies together with the need to reform the EU economic architecture, starting with the fiscal rules. Readers are well served here with thorough country studies followed by fascinating sectoral analyses of investment needs and strategies from health to energy and territorial cohesion.

Laszlo Andor, Secretary General Foundation for European progressive Studies, former European Commissioner for Employment and Social Affairs


We are increasingly coming to the realization that the world is facing existential challenges, from global warming, to pandemics, to antibiotic-resistant bacteria, etc. Whether we succeed or not will depend largely on public investment, on a scale we havenever seen. This book is simply essential reading.

Olivier J. Blanchard, Fred Bergsten Senior Fellow, Peterson Institute; Robert Solow Professor of Economics Emeritus, MIT


In the post-pandemic phase, we stand at a historical crossroad in the Digital transformation of society. What we really need is a new social contract. It is about using digital technologies to attain both social and environmental sustainability. Only by coupling digital transition with a Green New Deal will beable to break the binary logic that always and only presents us with two scenarios for the future of digital: Big State, the Chinese and Orwellian model; or Big Tech, the Silicon capitalism. Big State strips people liberties; Big Tech creates data monopolies that will eventually will eventually run critical in infrastructure such as healthcare or education, neither is an option for a democratic world. I advocate a third way: Big Democracy. I highly recommend reading the Great Reset: it is a must to understand how to face such a great transition.

Francesca Bria, Professor at UCL, President of the Italian Innovation Fund and Senior Advisor to the UN and of the EU on digital rights


Public investment is back in fashion. And it’s coming back with (quantitative and qualitative) vengeance. The widespread agreement that there are huge investment requirements linked to the green and digital transition marks a radical departure from the previous "dusty” view of public investment. "The Great Reset” provides not only a comprehensive empirical survey of the public investment needs in the EU, but also a compelling conceptual framework to look at one of the key challengesfacing policy makers today and in the years to come.

Marco Buti, Chief of Staff of the Commissioner for the economy, Paolo Gentiloni, former Director-General for Economic and Financial Affairs at the European Commission (DG ECFIN)


This relevant book provides excellent analysis of the European investment gaps in relation to climate change and digitalisation. Beyond the innovative Next Generation/EU package and the corresponding national programmes that are here analysed, much more is needed from the public sector, including to support and crowd-in private investment. In discussing fiscal multipliers and debt-ratio reduction through economic expansions, the book provides a good analytical basis for the issues at hand

Vitor Constancio, Former ECB Vice President, University of Lisbon


I greatly admire this timely book for its political boldness and policy sophistication. We are entering a disruptive epoch for which there is no post-crisis compromise in waiting. More than ever, we have to learn and act ahead of failure with an assertive public investment impetus. This well-researched volume makes the investment choices before us clear and realistic.

Anton Hemerijck, Professor of Political Science and Sociology, EuropeanUniversity Institute, Florence


'The Great Reset' provides a rich map of the public investment needs in Europe in the years to come. It comes with a first-rate conceptual compass to quantitatively and qualitatively analyze its impact. After a long period where it was subdued, the resurgence of public investment makes this contribution all the more useful.

Philippe Martin, Chairman of the French Conseil d’Analyse Economique and Professor at Sciences-Po


Next Generation –EU and, specifically, its main program (the ‘Recovery and Resilience Facility) are based on three pillars: digital transition, ‘green’ transition, and social inclusion. All these pillars require a huge amount of public and private investment, including those public expenditures that concern education, reskilling processes, and the reintegration into the labor market. Hence, the post-pandemic challenge for the European Union is quite ambitious. The selection and implementation of efficient public investment and the right incentives to effective private investment should achieve the European innovative objectives in the medium-long term; moreover, they should support economic growth, and thus keep under control macroeconomic and social disequilibria in the short term. This is really a "great reset”; and the analytical and empirical parts of the book offer a precious contribution to policy makers not to get lost in this new promising (dis)order.

Marcello Messori, Department of Economics and Finance, Luiss Rome


It is now clear in the internationaldebate on the recovery from the COVID-19 crisis that the task ahead is to tackle the inequalities the pandemic has exacerbated while promoting successful climate, digital and demographic transitions. Public investment will be essential to ignite and drive change. This impressive collection of studies from top researchers is indispensable to the toolbox of policymakers in Europe as well as across the globe.

Aurelio Parisotto, Head, Employment and Economic Analyses Unit, International Labour Office

The scaling-up of European funds to finance public investment is a unique opportunity to promote sustainable growth, convergence, and more cohesion in Europe. The plan is very ambitious for the size of the investment push and for its objectives, which encompass the key challenges that we are facing in the current juncture, from the health crisis to the transition to a greener economy. The outcomes of this investment scaling-up will likely shape not only the growth trajectory of the European economies, but also their economic and social integration. As the track record of absorbing European funds has often been far from optimal, this time around a structural change is needed to avoid missing a unique opportunity. In this respect, the collection of essays in this report is of first-order importance to raise awareness on the critical challenges that policy makers have to face and to hold them accountable to their promises. In the years to come, updates of the report will be essential to monitor the implementation and the results of the investment plans.

Andrea Presbitero, IMF


An important contribution for the overdue debate on the decline of capital expenditurein europe.
Lucrezia Reichlin, London Business School


The recent crisis of COVID 19 pandemic has revealed the need of higher public investments in Europe. Indeed, this outstanding book provides the reader with the necessary tools to understand both the short and long run effects that these measures might have in the European Economy. Needless to say that, for this elegant analysis, the authors in the book use intensively high quality data provided by all European statistical offices. This data, combined with suitable methodologies are absolutely necessary to succeed in the pursuing analysis.

Juan Rodríguez-Poo, President of the National Statistics Institute of Spain

The European Union is facing critical societal challenges ranging from the short-run COVID-19 pandemics to the medium-run climate emergency. Nested in the long-run productivity slowdown, they may compromise the very existence of the EU. But a new wave of public investment is able to transform such challenges in opportunities for smart, inclusive and sustainable growth. This is the critical point of this book, which is a breadth of fresh air in the current debate about European policies.

Andrea Roventini, Scuola S. Anna Pisa


Since the 1970s public investment has not received the attention it deserves, a mistake we have paid with underinvestment in public goods such as infrastructure and education. This book is a public service, an important stepping-stone in correcting this mistake. Public investment will be key in facing global warming and other collective challenges.

Paul Sengmüller, Austrian Financial Market Authority

The last few years have served to underscore the role of government and public investments in both health and the social safety net. This is true in Europe an around the world. This book provides necessary reading for both the role that governments played during the pandemic and what needs to be done going forward.

Mark Stabile, INSEAD

After the dark period of the Euro crisis, with unprecedented spending cuts in a number of countries, protecting and improving public investment is finally and forcefully back on the political agenda. The Great Reset provides exactly the richempirical information required to evaluate both the current state and needed development of the public capital stock, in order to guide European policy makers in the crucial decisions ahead.

Achim Truger, German Council of Economic Experts & University of Duisburg-Essen



One of the consequences of the crisis due to the Covid-19 pandemic has been the end of the austerity measures, which have characterized European economic and fiscal policy in the last two decades. Massive investment programs are in progress in every EU Member State. The title of this second edition of the European Public Investment Outlook is spot on: The Great Reset. Increasing public investments is a crucial part of this process and change of mindset. The EU and the world will of course have to face huge challenges in the future. The high level of the contributors and the wide spectrum of sectors covered makes this a unique and outstanding contribution.

Tommaso Valletti, Professor of Economics and Head of the Department of Economics and Public Policy at Imperial College London. Former Chief Competition Economist of the European Commission