Europe is suffering a huge shortfall in infrastructure investment, says a new report by Chatham House, and must find innovative approaches to finance and manage infrastructure investment in the future.
It has been estimated that a further €2 trillion is needed between 2013 and 2020 than currently planned. This shortfall is due to grow to almost €15 trillion by 2030 in the face of ageing populations, environmental changes and the need to replace existing infrastructure. Moreover, European banks are constrained with funding capacity and are still dealing with the effects of the financial crisis.
Building Growth in Europe: Innovative Financing for Infrastructure offers policy recommendations for matching the demand for investment with the available financial resources.
The report says Europe needs to develop a pan-European infrastructure strategy to channel long-term capital into ‘good’ infrastructure investment. It is equally critical to improve the allocation of structural and cohesion funds, and to promote the use of project bonds issued by national development banks in Europe, as ways to fill financing gaps and drive economic activity, productivity growth and job creation.
Author Dr Paola Subacchi, Research Director, International Economics, says:
'Europe now has a window of opportunity to revive economic growth with abundant liquidity and cheap borrowing costs, created by the current low interest rate environment. If economic actors, both public and private, can be encouraged to take advantage of these conditions to increase investment in infrastructure, this can unlock the potential for strong and balanced growth in Europe.'
EMBARGOED UNTIL TUESDAY 30 SEPTEMBER 2014, 17.30 BST
Read: Building Growth in Europe: Innovative Financing for Infrastructure, by Paola Subbacchi, Stephen Pickford, Davide Tentori & Helena Huang
Launch event at Chatham House, 30 Sep 2014 - 17:30 to 19:00
Geoffrey Spence, Chief Executive Officer, Infrastructure UK, HM Treasury
Julia Prescot, Chief Strategy Officer, Meridiam
Armin Brestrich, Head of London Branch, KfW IPEX-Bank GmbH
Giorgio Chiarion-Casoni, Head of Unit, DG Economic and Financial Affairs, European Commission
Stephen Pickford, Senior Research Fellow, International Economics, Chatham House
Chair: Philip Coggan, Buttonwood Columnist and Capital Markets Editor, The Economist
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