Infrastructure investment is lagging and EU countries have been under-investing for decades, causing increasing gaps and reduced quality. The space of manoeuvre of governments, especially in high debt countries, has been extremely reduced as a consequence of the crisis. The involvement of all types of promoters of infrastructure projects is necessary to allow the EU countries to reach their new policy goals - from climate mitigation to energy targets, from environmental quality to broadband diffusion - and restore the quality of the infrastructure stock.
The aim of the research is first to improve our understanding of the infrastructure investment gaps in the EU, taking into account the economic, fiscal, political and institutional factors that could play a relevant role. Then, we critically examine the main financing options to fill these gaps by selecting those apt to reversing the current negative trends.
A special focus will be devoted to Public -Private Partnerships (PPP). The European PPP market almost completely dried up in recent years and the emergence of a very cautious political attitude largely explains this trend. We analyse the determinants of the PPP option, to provide a new, balanced narrative of the pros and cons of their employment. In particular, we examine if they could be positively employed to finance the new investment need related to climate change mitigation.
Our contribution to the literature would be as follows
Part 1 . No analysis has so far been conducted for public investment determinants. We would test the significance of general economic determinants and also of demographic, social and political variables and variables for institutional settings. Besides, we would compute the investment gaps for the EU countries, which is relevant for any policy intervention.
Part 2. We would analyse the determinants of PPP financing. These empirical findings should contribute to a new assessment of costs and benefits of PPPs to promote infrastructure financing.
Part 3. We would employ the findings in part 1 to examine the gaps in green infrastructures and the findings in part 2 to identify which elements would be necessary to establish robust frameworks to support PPPs in climate finance.
The research results would thus provide some policy orientation with respect to the new challenges that EU countries will have to face and that would require a more precise understanding of the need, the available sources of financing and the barriers to their employment.