Newsletter: Juncker's investment plan

Economic news n.4
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Juncker's Plan: expectations & concerns
(by J. Stiglitz, U. Bullmann, T. McKinley, S. Griffith-Jones…)

There is a growing consensus among policy makers that the Union needs to take bold steps to increase investment. There is also significant concern that an effective investment plan would only work with additional funds, appropriate financial instruments and a further increase in the EIB’s capital.

Juncker has now less than one month until the next European Council of Heads of Government (Brussels, 18-19 Dec.) to consider that, when accompanied by continued reduction in government spending and revenue, his €300bn investment package might not be sufficient to stave off secular stagnation throughout Europe.

Finally, Juncker should not forget the pledge for re-industriallisation launched by the Commission during the crisis. This called for industrial production to reach 20% of GDP by 2020. Achieving this target would require a significant turnaround in existing industrial and investment policies.

Can Conventional Macroeconomic Policies Prevent 
Persistent Stagnation  in the European Union?

Using the CAM macroeconomic model, this FEPS-CDPR Policy Brief (number 5) explores the effects of Junker’s 300 billion investment plan under the assumption of continued austerity policies. This brief argues that the scale of this plan when accompanied by continued reduction in government spending and revenue would not be sufficient to stave off secular stagnation throughout Europe.
Read the Econ. Policy Brief n.5

Recovering investment, jobs and growth in Europe.
A proposal

This Economic Policy Viewpoint (number 9) by Giovanni Cozzi and Stephany Griffith-Jones highlights two promising paths to use limited public resources to finance the 300 billion investment plan proposed by Commissioner Juncker. Further, this brief argues that when the investment plan is accompanied by a more expansionary fiscal stance it could generate up to 5 million jobs across Europe of which 3 million jobs would be in the Eurozone periphery.
Read the Econ. Policy Viewpoint N.9
Industrial and investment policy - what a well-structured package can achieve
During the crisis, the EU Commission (and the Council) called for re-industrialisation of the EU 2012. The Commission defined the objective of 20% of GDP in 2020 created by industrial production. Achieving the objective would require a turnaround of existing developments and existing policies. This study by Matthias Kollatz- Ahnen and Udo Bullmann, presents some progressive proposals for re-industrialisation of Europe. It explains how to create additional investment with a mix of public and private financing.  
Read the study

Read our Queries Magazine on European Industrial Strategy with articles from M. Mazzucato, M. Aglietta, M. Ulbskog, J. Grahl, A. Giddens…

FEPS-IPD Conference on Investment and Growth in Europe
Watch the presentation of the Nobel Prized Joseph Stiglitz
Watch the speeches of: Stephany Griffith Jones, Jose Antonio Ocampo,
Alfred Gusenbauer and Adam Posend
Watch the photos of FEPS-IPD evening debate
Watch the photos of FEPS-IPD conference
More information
Alain Bloëdt, FEPS Communication Advisor - - +32 2 234 69 01
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