An investment and equality-led sustainable growth programme for Europe


FEPS, in collaboration with TASC (Ireland) and the European Council of the Labour Movement – ECLM – (Denmark) have set up a research project with the aim of analysing policies to stimulate investment and increase equality and achieve a sustainable growth model for Europe and each individual member state.

During the past 20 years investment across Europe has drastically declined with severe negative consequences for productivity, growth and employment opportunities. In the meantime, inequality has increased; as the share of wages in national income decreased dramatically, the rise in profits have been ineffective in stimulating investment, productivity, and job creation. The stagnation in investment has also posed severe challenges to tackle the urgent issue of climate change. At the same time these trends were accompanied by a significant structural change in the functioning of our economies marked by the growing prominence of the ‘financial motives’ and the influence of the financial sector.

The project builds on three Modules to provide both a novel theoretical framework and empirical evidence regarding the causes of stagnation in investment and growth:

  1. Module 1 will analyse the role of public investment in an equality-led recovery strategy for Europe by integrating government spending and taxation in a wage-led growth model for the EU15 countries(separately for each country and in aggregate) ;
  2. Module 2 will analyse the impact of financialization, in particular the increasing financial activities of the non-financial corporations on investment in the EU15 (separately for each country and in aggregate);
  3. Module 3 will provide empirical evidence on the role of government spending in supporting employment-enhancing activities, and the complimentary relationship between public and private investment in generating sustainable and equitable growth for Europe.
  4. Finally Module 4 aims at presenting the project findings for a general audience and derives policy conclusions for the European Union. The module will list in a concise manner a set of policy proposals for the European Parliament and the European Commission.


Foundation for European Progressive Studies:

Dr. Elva Bova

Greenwich Political Economy Research Centre (GPERC):

Prof Ozlem Onaran, University of Greenwich (Principal investigator)

Dr  Giovanni Cozzi, University of Greenwich (Principal investigator)

Dr  Maria Nikolaidi, University of Greenwich (Co-investigator)

Research Assistants at the University of Greenwich: Thomas Obst, Daniele Tori, Shanaz Sumra

Economic Council of the Labour Movement:

Lars Andersen

Signe Dahl 

Selected background material

Bargawi, H. and Cozzi, G. (2016). ‘Engendering Economic Recovery: Modelling Alternatives to Austerity in Europe’ in Bargawi, H., Cozzi, G. and Himmelweit, S. (eds) Lives after austerity: gendered impacts and sustainable alternatives for Europe. London: Routledge (Routledge - International Association for Femminist Economics book series) 

Cozzi, G. (2016). ‘Finance and Investment in the Eurozone’ in Cozzi, G. Newman, S. and Toporowski, J. (eds), Finance and Industrial Policy: Beyond Financial Regulation in Europe. Oxford: Oxford University Press.

Griffith-Jones, S. and Cozzi, G. (2016). ‘Investment-led growth a solution to the European crisis’ in Jackobs, M. and Mazzucato, M. (eds), Rethinking Capitalism: Economic Policies for Equitable and Sustainable Growth, London: Wiley-Blackwell.

Onaran, O., Obst, T. (2015)  Wage-led growth in the EU15 Member States . The effects of income distribution on growth, investment, trade balance, and inflation. Study

Onaran, O., Obst, T. (2015) The Empirical Case for a Wage-led Recovery. Policy Viewpont n.7

Onaran, O. (2014). Europe needs a wage-led recovery Policy Viewpoint n3 

Cozzi, G. and Griffith-Jones, S. (2014) Bringing Europe back to life using investment. FEPS economic policy viewpoint n.4