Milan, 17/09/2014 (Agence Europe) - During their informal meeting on Tuesday 16 and Wednesday 17 September in Milan, EU transport ministers, on the initiative of the Italian presidency, discussed the Cornelian dilemma of infrastructure funding.
The Italian minister, Maurizio Lupi, opened a debate on flexibility in the Stability and Growth Pact, so that EU countries can ensure funding for infrastructure. Other possible avenues will also be explored over the next few months, in an effort to ensure leverage of €100 billion.
Flexibility. The draft conclusions from this informal meeting mention the continuation of “common reflection” on application of the Stability and Growth Pact, particularly the clause relating to investment. This results from the fact that construction of the Trans-European Transport Network (TEN-T) will cost €500 billion by 2020 at the very least. With only €26 billion planned for the European budget to this effect, via the Connecting Europe Facility (CEF), ministers are looking at the high volume of investment that will need to come from member states' pockets. Creating public deficits is not an option for member states under the Stability and Growth Pact. They are, however, legally obliged to put in place priority infrastructure under TEN-T (Regulation 1315/2013). Maurizio Lupi asked, “is it possible to reconcile the irreconcilable if the EU wants it to arrive on time?” Following the conduct outlined by his government and the Italian presidency, he therefore encouraged his European counterparts to rethink the way in which this investment should be taken into account in the Stability and Growth Pact: “if this infrastructure is a priority, Europe must do something to facilitate the construction of it”. The French delegation would support him in this perspective but the Dutch and British delegations would not. Germany did not make any comments during the work session. The ministerial debates therefore reflect what was said between finance ministers and at higher levels. For Lupi, however, this is a significant step forward, which will continue at the Transport and Ecofin Councils.
Innovative finances. With public funding scarce, European ministers will also seek to examine innovative financing in an effort to maximise investment and attract private investors. The possibility of introducing tolls will be further explored, as well as project bonds, guarantees and leveraging EU funds on the capital markets. Lupi said the combination of these instruments could create a leverage effect of €100 billion. The report is also expected to be presented to ministers during the Transport Council on 3 December on the subject, which will be prepared by the former Commissioner for Transport, Henning Christophersen, two TEN-T coordinators (Bodewig and Secchi) and the European Investment Bank. The report is expected to work out what the most appropriate financial instruments will be and for what infrastructure projects (per corridor).
Governance. Ministers also discussed implementation of the nine TEN-T corridors. A work plan is expected to be submitted by the coordinators for them over the next three months, which is expected to include the infrastructure projects that will be begin because they are regarded as priorities. Ministers examined the nature of this document and whether it should be binding or not. There is no consensus on the matter or on the role played by the European Commission in the coordination of the infrastructure work. A lot of delegations are afraid of Commission interference. Ministers would prefer it to play a role of assistant rather than one of monitoring.
Ministers also took note of the announcement by Jean-Claude Juncker of a €300 million package for growth, job creation and investment, promised over the three months following his inauguration as president of the European Commission. In their draft conclusions, ministers highlighted the fact that transport infrastructure should be a cornerstone in their approach. (MD)