Source: AnnMarie Mangion¸ PKF Malta
This report has been produced by the European Policy Centre (EPC) in the context of a research project supported by the European Investment Bank (EIB) were it analyses stakeholders perceptions of the role that Public Private Partnerships (PPPs) could play in responding to Europe’s current challenges. The largest challenge being to help Europe exist crisis and achieve the ‘Europe 2020’ strategy.
A total of 10 conclusions and recommendations were brought up in this research.
1st Recommendation: To ensure a realistic understanding of the wide range of new financial instruments currently being debated at EU level¸ the Commission should produce a simple¸ easy-to-use guide/glossary¸ aiming to describe the nature and functioning of financial instruments and different types of public-private cooperation in a manner which is accessible to all decision-makers.
Public-private cooperation’s role in particular PPPs lack clarity for many stakeholders¸ in the sense that it is unclear what specific contributions PPPs are expected to make to achieve the European policy objectives and the Europe 2020 strategy.
2nd Recommendation: The European Commission needs to clarify how financial engineering will work in the next MFF and set out the policy objectives for which specific financial instruments are to be used and the impact that this is expected to have on grant-based budget lines.
From this conducted research found a number of areas where stakeholders have identified a need to help public authorities¸ design and bring forward PPP solutions. The project Bonds Initiative is a concrete and detailed proposal which is already on the table and it can help to make potential PPP projects financeable through capital markets and to contribute to the development of financial markets. Even though the pilot phase is likely to concentrates in countries which have established PPP mechanisms in place¸ between 2014 and 2020 other countries could also potentially experience increased usage of PPPs¸ supported Project Bonds.
3rd Recommendation: While there are limits to the Project Bonds Initiative¸ it has the potential to boost PPPs in a number of countries and should thus be introduced as quickly as possible¸ while at the same time addressing stakeholders’ misconceptions about what EU project bonds are and what they aim to do.
Project Bonds have their own limits such as; they are unlikely to work in countries where sovereign debt ratings are poor and where high levels of risk and uncertainty characterise the investment climate. An important issue is that it should be made clear that project bonds are neither an instrument to introduce EU-level borrowing or finance EU projects¸ nor will they alone deliver all the required large-scale private investment in EU-wide networks.
4th Recommendation: In areas where public-private cooperation can potentially add most value¸ for example research funding¸ transport including the TEN-T network¸ elements of structural/cohesion funding and the Connecting Europe Facility¸ an ex-ante obligation sho