CoR President Markkula: "Ageing infrastructure and insufficient investment in innovation, digital and ecological transition is not only slowing down Europe's economic recovery, but also threatens Europe's competitiveness and potential to grow."
The recovery of the EU economy is ongoing despite increasing uncertainty worldwide. Cutting red tape, improving local and regional administrative know how, raising awareness about EU investment tools as well as adapting economic governance should help recover this missing investment in Europe's economy. This is the message of local and regional leaders, who adopted an opinion on the investment gap and a resolution on the Annual Growth Survey 2017 during the plenary session of the European Committee of the Regions (CoR) in the presence of EIB Vice-President Vazil Hudak.
Unemployment rates are still too high in close to all regions of Europe and several years of under-investment – the so called investment gap – still weighs on Europe's competitiveness and cohesion. " Europe's economy is suffering from a gap in public and private investment estimated at around EUR 250bn compared to investment before the financial and economic crisis" , stressed Markku Markkula, CoR president and rapporteur of the opinion " Bridging the Investment Gap: How to tackle the Challenges " ( see infographic ).
" An investment gap is a reality in many parts of our continent. Increased EIB lending volumes stimulating the economy are therefore still very much needed. But smart and sustainable investment is only possible when projects are ready. In many parts of the EU we see low capacity to prepare projects, both from a technical and financial point of view. This is why the EIB wants to substantially boost its advisory offer - not just at the headquarters in Luxembourg but also locally, across Europe ", said Vazil Hudak, Vice-President of the European Investment Bank (EIB).
With local and regional authorities being responsible for more than half (54%) of public investment, obstacles often have their roots but consequently also their solutions in cities and regions, argues Markku Markkula, CoR president and rapporteur of the opinion. " Strategic investments in complex global settings call for new types of administrative and managerial capacities. Too often, the lack of awareness and knowledge at local and reginal level about EU funding, financing and investment opportunities holds back both public and private investment. "
Of the 178 territory-related issues raised in the 2016 country recommendations in the framework of the European Semester, almost 60% address obstacles to investment, mainly naming burdensome regulations, insufficient quality of public administration, specific barriers in the labour market and in the funding for small and medium-sized enterprises. The CoR members call in their opinion and resolution for far-reaching structural reforms. Suggestions include:
Administrative capacity :
cutting excessive red tape to make the investment environment more accessible
emulation and broadening of the " TAIEX REGIO PEER 2 PEER " tool
support for the Fi-Compass platform , as well as the Commission's "off-the-shelf" financial instruments
European Scoreboard on local and regional investment including data on currently existing investment projects, testimonials an concerns at grassroots level
Lack of awareness :
Making better use of the European Investment Project Portal , which aims at bridging the gap between EU project promoters seeking financing and investors
the decentralisation of advisory and expert services while strengthening the role of the European Investment Advisory Hub in order to address the geographical imbalance of EFSI
the promotion of cross-border connections and multi-level cooperations by actively promoting cross—regional investments to speed-up the Pan-European Single Market and the Capital Markets Union
Financial instruments :
moving EU investment tools towards the use of loans and innovative financial instruments where appropriate
securing EU cohesion policy beyond 2020 as the backbone of EU investment policy
further simplification of EU shared management funds
assessment and fine tuning of existing instruments like the cohesion funds and the European Fund for strategic investment (EFSI) to act complementarily while operating in synergy
Economic governance :
the full use of flexibility allowed by the Stability and Growth Pact and investment made by local and regional authorities under the ESIF should be excluded from the calculations of the deficit and debt ceilings
a stronger and more structured involvement of local and regional authorities in the European Semester through a code of conduct
minimum public investment targets in the country-specific recommendations of the European Semester
a White Paper setting out an EU-level typology for the quality of public investment recognising the important and growing role of regional and local authorities in planning and implementing public investment
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