EU should invest in Greece, not just lend it money

Nick Malkoutzis, Kathimerini (English edition), 14.05.2011

Quotes

Link to original article


A restructuring of Greece’s debt or a second bailout from the European Union and the International Monetary Fund coupled with austerity measures and structural reforms will not be enough to ensure the country’s long-term economic future, according to the chief economist at a leading Brussels think-tank who is urging the EU to generate greater investment in the debt-ridden country. [...]

In a commentary published in the Brussels press last week, Zuleeg and co-author Janis Emmanouilidis, EPC’s senior policy analyst, put forward their proposal for a “new deal” to save the euro, and possibly Greece in the process. Their basic argument is that as long as Europe’s core continues to prop up its periphery through loans rather than developing initiatives to foster growth, there can be no long-term stability or progress.

Zuleeg and Emmanouilidis propose five tools to encourage growth so the EU can avoid becoming the “transfer union” that countries like France and Germany dread.
They call for debt-ridden countries like Greece to push through reforms in administration and the labor market; for productive investment sectors, such as education, to be exempted from austerity programs; for a reallocation of the EU budget with less focus on gross domestic product and more on combating the crisis and reducing imbalances; for the establishment of a dedicated fund – a new Stability and Growth Fund – to drive investments in countries that cannot afford them; and to increase the use of new loan instruments, such as project bonds, with the help of the new fund, the European Investment Bank and the European Bank for Reconstruction and Development.

“We propose a Stability and Growth Fund that is capable of investing in productive capacity and in infrastructure in areas where there is a need to modernize,” Zuleeg told Kathimerini English Edition. “This would come from a combination of structural funds, cohesion money together with any profit that is made on the loans that are given to Greece at the moment. Along with private-public partnerships this could be a substantive form of investment.”

Zuleeg and Emmanouilidis’s “New Deal” is in the same spirit as existing proposals that have called for the EU to issue project bonds for Greece, which would allow investors to put their money into specific infrastructure projects, as a way of stimulating the economy. So, what is keeping the EU from considering investment initiatives rather than just providing loans to support Greece? [...]

For the entire article see here.

Latest media contributions

Ursula von der Leyen: Erste Rede zur Lage der Union
Interview, WDR 5 (German radio), 16.09.2020

"Eine Gesundheitsunion ist ein sehr ambitioniertes Ziel"
Interview, rbb (German radio), 16.09.2020

Ein ganz anderes Europa
Interview, tagesschau.de, 15.09.2020

Comment l'Europe tente de mettre fin au bazar des avis de voyage
Quotes, La Libre Belgique, 04.09.2020

EPC Update – analysis of ongoing COVID19 situation and state of affairs regarding Brexit
Online Briefing, YouTube, 04.09.2020

Les Etats-Unis d’Europe, un rêve encore lointain
Quotes, Capital (FR), 22.07.2020

Charles Michel a trouvé la bonne méthode : "Le succès du Conseil européen, c’est aussi le sien"
Quotes, La Libre Belgique, 21.07.2020

Angela Merkel Guides the E.U. to a Deal, However Imperfect
Quotes, The New York Times, 21.07.2020

EPC Update – analysis of ongoing negotiations on MFF & Recovery Package
Online Briefing, YouTube, 20.07.2020

Erste Einigung bei Milliardenzuschüssen
Quotes, ORF, 20.07.2020


Media