MNI: EU Ministers Want Private Funds To Boost Competitiveness
MNI (LONDON) - Eurozone finance ministers will come out against ideas of an expansive role for public funding to boost European competitiveness at either the national or European Union levels, according to a draft statement to be published next Monday and seen by MNI.
“At a time when public finances have been affected by multiple crises and gradual and sustained fiscal consolidation is needed, the necessary investment should come primarily from private sources,” the ministers will state.
Public funds should serve only as a “catalyst” for leveraging private capital, they will say.
“Effective ways to catalyse and leverage private capital should be explored at the national and European level, including through the involvement of the European Investment Bank,” the statement says. (See MNI POLICY: Repaying NGEU Stays Top Priority Despite Draghi)
DRAGHI REPORT
European financing has an important role to play where the focus is on “public goods” which can be more effectively delivered jointly, the ministers will concede, echoing the call made by Mario Draghi for pan-EU infrastructure investments in his recent report on the EU’s competitiveness.
A key priority will be investment in better and more cost-effective electricity grids as well as better cross-border energy interconnections, which could also ease pressure on public funds:
“An integrated and flexible European electricity market, connecting the renewable potential to areas of high demand within the Union, will lead to lower and more stable prices, attract private investment, reduce the need for storage and public subsidies for energy production, including renewable energy production, and strengthen our energy security,” the statement says. “This, in turn, would lower fiscal pressures by reducing the need for energy subsidies and support economic growth by lowering costs for businesses and households.”