Garonna Reviglio Cop 02:17x24 27-11-2015 17:23 Pagina 1 P . G A INVESTING IN LONG-TERM EUROPE R O N RE-LAUNCHING FIXED, NETWORK N INVESTING IN A , AND SOCIAL INFRASTRUCTURE E . R E PAOLO GARONNA V LONG-TERM EUROPE I G EDOARDO REVIGLIO ( eds. ) L I O RE-LAUNCHING FIXED, NETWORK I N V AND SOCIAL INFRASTRUCTURE E S C T o p I e This Volume collects contributions on the critical link between investment and growth in N r t i G n PAOLO GARONNA Europe. It aims at documenting, and building on, the fundamental shift in policy concepts a d I i N E t that took place in the EU around 2015. This period was defined by the critical transitions t o L r e EDOARDO REVIGLIO ( eds. ) O F underway: from recession to recovery; from inward-looking interrogations to pressure for e N s t a G , action and delivery; from the Barroso Commission to that of J.C.Juncker; from depression H - a u T n a to market volatility and uncertainty; from domestic political bickering to threatening geo- E g R D e M political instability; from one European legislature to the next. s i g n E Financial markets have been at the center of all these transitions. Indeed, to some extent U R they contributed to the challenges with their own transitions and vulnerabilities. However, O P at some point, something happened that changed the picture. A clearly perceived E discontinuity determined a break with the past. The world of finance was at the heart of it, not only as part of the problem, but above all as part of the solution. “Finance for growth” encapsulated this change of sentiment. The contributions to this Volume, representing a variety and a wide-range of points of view and perspectives, illustrate the meaning and value of “finance for growth”, and how and why this concept can be apply, and has been applied to the most prominent items in the European economic policy agenda. Paolo Garonna is Secretary General of the Italian Banking Insurance and Finance Federation (FeBAF) since October 2012, and professor of Political Economy at the LUISS Guido Carli University in Rome. Edoardo Reviglio is Chief Economist of Cassa Depositi e Prestiti (CDP), and professor of economics at LUISS Guido Carli University in Rome and at the International University College of Turin. www.luissuniversitypress.it . luiss academy Dedicated to Fausto Felli, “Novissima autem inimica destruetur mors: omnia enim subiecit sub pedibus eius cum autem dicat”.* S. Paul, First Epistle to the Corinthians *“The last enemy that shall be destroyed is death: For He has put everything under His feet”. Investing in Long-Term Europe Re-launching fixed, network and social infrastructure Paolo Garonna and Edoardo Reviglio (eds.) © 2015 Luiss University Press – Pola s.r.l. a socio unico All rights reserved isbn 978-88-6856-052-2 Luiss University Press – Pola s.r.l. Viale Pola, 12 00198 Roma tel. 06 85225485 fax 06 85225236 www.luissuniversitypress.it e-mail [email protected] Graphic Design: HaunagDesign Editing: Spell srl Table of Contents Introduction Paolo Garonna, Edoardo Reviglio ...........................................................................p. 11 part i investing in long-term europe. where do we stand? progress made and next steps Views from the front-line: the policy thrust Contributions from: Pier Carlo Padoan, President ECOFIN 2014 and Italian Minister of Economy and Finance ..................................................................................“ 31 Martin Schulz, President of the European Parliament .......................................“ 34 Rintaro Tamaki, Deputy Secretary General OECD ...........................................“ 35 Jonathan Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union ..................................................“ 38 Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs .....................................................................................“ 43 Michel Sapin, French Minister of Finance ........................................................“ 47 Views from the front-line: new industrial perspectives Relaunching Long-Term investment and financing in Europe Italian Banking Insurance and Finance Federation ............................................“ 51 Long-Term investments in Europe from the financial crisis to the Juncker Plan Franco Bassanini, Edoardo Reviglio ..................................................................“ 59 Long-Term investing for Europe: solutions from the insurance industry Bernard Spitz ..................................................................................................“ 81 Investing in Long-Term Europe Philippe Herzog ..............................................................................................“ 86 Long-Term investment is vital for Europe Philippe Legrain ..............................................................................................“ 92 The expected evolution in the Eurozone banking system Federico Arcelli ................................................................................................“ 95 Infrastructure as a global asset class Sara Bonesteel .................................................................................................“ 98 8 table of contents Financing Infrastructure in Europe. The Juncker Plan and the role of the National Promotional Banks Franco Bassanini, Edoardo Reviglio .................................................................p. 101 Investment in Europe needs a new architecture: the Eurosystem of National Promotional Banks Natacha Valla ................................................................................................“ 112 Views from the front-line: the shifting institutional framework Institutional response to investing in Long-Term Europe Gabriel Bernardino ........................................................................................“ 131 Building better portfolios: institutional investment asset allocation trends and the role of infrastructure Raffaele Della Croce, Joel Paula .......................................................................“ 134 Long-Term investment: a priority of the Italian Presidency of the EU Fabrizio Pagani ..............................................................................................“ 139 Three priorities in Long-Term investing: jobs, capital and financing Carlotta De Franceschi....................................................................................“ 141 part ii re-tuning the european public-private partnership agenda Building growth in Europe: innovative financing for infrastructure Paola Subacchi, Stephen Pickford, Davide Tentori and Helena Huang ...............“ 145 The FeBAF decalogue: ten proposals for a leap forward in financing infrastructure Italian Banking Insurance and Finance Federation ..........................................“ 149 Action plan for the development of project financing: 12 recommendations Henning Christophersen, Kurt Bodewig, Carlo Secchi .......................................“ 151 Focus on energy and transport networks Giovanni Gorno Tempini ................................................................................“ 156 part iii the unexplored business within social infrastructure An overview Jonathan Watson, Amaía Buján Otero, Fausto Felli, Steve Wright, David Wood, Lorenzo Scione ...............................................................................................“ 179 Institutional investors thinking about investing in social infrastructure Organizing demand for infrastructure investment with high social value David Wood ...................................................................................................“ 191 9 Investing in social infrastructure Matti Leppälä ................................................................................................p. 196 Pension funds, insurance and infrastructure, a complex debate Francesco Briganti ..........................................................................................“ 198 Pension investment in infrastructure: from a real disappointment to a ‘real asset’ Nicolas Firzli .................................................................................................“ 201 Social infrastructure: private finance and institutional investors Georg Inderst ..................................................................................................“ 204 The role of insurance companies Olav Jones ......................................................................................................“ 210 The role of trades unions Fausto Durante, Claudia Menne .....................................................................“ 215 Models of cooperation between institutional investors, promotional banks and European Structural & Investment Funds (ESIF) Giorgio Chiarion-Casoni ................................................................................“ 217 Sectoral and regional opportunities Debating the role of the institutional side in relaunching investing in social infrastructure Michael Hornsby ...........................................................................................“ 221 Social and financial sectors working together to provide funding solutions to social housing in Scotland Ian Marr .......................................................................................................“ 225 Investing in responsible and sustainable health infrastructure in Hungary Miklós Szócska ...............................................................................................“