Better use of resources is the means to growth, prosperity and welfare - but will the EU jump on the opportunity? EPC Commentary, 25 September 2014

As the new European Commission steps in and looks for ways to promote growth and competitiveness, its success will depend on what emphasis will be given to creating a more sustainable European economy. What will determine the EU’s competitiveness and comparative advantage on a global scene is how well we will respond to the ongoing economic and ecological crises – which are intertwined and reinforce each other. The big question is what emphasis will the new Commission and the EU as a whole give to promoting sustainable and greener growth, based on good management of natural resources and biodiversity, smarter use of resources and mitigating climate change?

In sickness and in health: protecting and supporting public investment in Europe. Bruegel Policy Contribution 2014/02, February 2014

The long-term decline in gross public investment in European Union countries mirrors the trend in other advanced economies, but recent developments have been different: public investment has increased elsewhere, but in the EU it has declined and even collapsed in the most vulnerable countries, exaggerating the output fall. The provisions in the EU fiscal framework to support public investment are very weak.The recently inserted ‘investment clause’ is almost no help. In the short term, exclusion of national co-funding of EU-supported investments from the fiscal indicators considered in the Stability and Growth Pact would be sensible. In the medium term, the EU fiscal framework should be extended with an asymmetric ‘golden rule’ to further protect public investment in bad times, while limiting adverse incentives in good times. During a downturn, a European investment programme is needed and the European Semester should encourage greater investment by member states with healthy public finances and low public investment rates. Reform and harmonisation of budgeting, accounting, transparency and project assessment is also needed to improve the quality of public investment.