Since the investment plan for Europe was presented in November 2014, some signs of confidence have returned to the European economy, as reflected in growth figures.
However, there are still 22 million people unemployed, investment remains 15 per cent below the level recorded before the crisis began in 2008 and a further €300bn in investments would be needed every year to get back to pre-crisis levels.
The provision of high quality and efficient public services is a key issue in most developed and developing countries. Similarly, infrastructure, transport, telecom and energy are key factors for growth and employment in all countries.
The recent financial crisis, following on from the Lehman Brothers bankruptcy and its spill over into the public sector, has brought about drastic changes, especially in the conditions in Europe for financing both services and investments.
Public deficits, increased public debt, fiscal consolidation, misallocation of resources and in some cases the inability to deliver efficient services and investment spending have increased the pressure. In many countries this has led to a reduction in public economic and social services as well as in public investments.
Europe, with 50 per cent of worldwide social spending, leads the world in public services, but more efficient and cost-effective public services are required if it is to maintain that position. Traditionally, public services and infrastructure have been financed with public funds. In addition, public procurement, which represents 19 per cent of GDP in Europe, is a strong lever for growth.
However, it seems unlikely that traditional public procurement and public spending for infrastructure can continue on the same terms. National governments need to rethink the question of providing for public services and investments.
They need to attract greater private capital and strengthen cooperation between the public and private sectors, since this can improve the provision of public services and greatly contribute to modernising the public sector. Setting up public-private partnerships (PPPs) might be a major help in achieving this objective.
In practical terms, clear and stable regulation, efficient public procurement procedures and certainty regarding schedules are preconditions for attracting private capital.
Co-financing and risk sharing are the substance of PPPs with multiple models, such as contracted operations, concessions with public ownership and concessions with private ownership, each adapted to different public services.
The European Economic and Social Committee approved its opinion on the extension of the European fund for strategic investment (EFSI 2.0) - the so-called Juncker plan - in December 2016. EFSI 2.0 should make it possible to carry out higher-volume financing, up to €500bn, and investment operations in line with EU priorities in more risky but economically sustainable projects thanks to the EU guarantee it receives up until 2020.
The European Economic and Social Committee (EESC) strongly endorsed the Commission's initiative of extending the duration and increasing the financing of EFSI and agreed with its purpose and its importance for ensuring stability and certainty in investors and project promoters. The Committee also supported extending EFSI timescales and funding to include an even longer-term outlook, to make sure that intervention was systematic and uninterrupted.
As rapporteur of the EESC opinion, I would like to highlight three points relating to PPPs.
First, EFSI 2.0 should aim for ever greater involvement of private capital, if possible topping the 62 per cent achieved in the first year. In that respect, the Committee proposes carefully considering extending its scope to branches of finance apart from banks: financial sectors, the bond market and insurance and investment funds.
The EESC agrees with the need for an additional fund geared primarily to mobilising private investment. At European level, institutional investors manage assets of €13,500bn, less than one per cent of which is invested in infrastructure.
Second, EFSI has far greater funding than other EU initiatives and as such allows for investment in large-scale European projects worth more than €10bn, supported mainly by private capital (for example: the European air traffic control system, the European railway traffic management system, connected and automatic driving, the North Sea meshed offshore grid for wind farms, industrial gigabyte, high performance computing, and broadband rollout across Europe).
To implement these projects, the Commission needs to strengthen its proactive role to allow it to support the joint launching of various European programmes and determine the appropriate regulatory framework, especially in the sector of transport, energy and ICT networks, areas with the highest GDP economic multipliers.
Third, the EESC calls for reinforcement of the social dimension of EFSI deployment such as in education, training and vocational training for skills and lifelong learning, developing the creative and cultural industries, innovation in healthcare and medicine, and social services, social housing and childcare, tourism and environmental protection infrastructure.
The investment plan for Europe should clearly support the COP21 commitments. In my view, these goals will require stronger public financial support than other sectors to succeed, and to this end blending with other European and national programmes could be beneficial.
The increased pressure on public budgets and major societal are challenges to contend with. If PPPs can offer better value for money, enforceable quality standards, wider choice, innovative solutions and the possibility of combining the expertise and skills from both the private and public sector, then they should be pursued.