On the eve of the EU’s Spring Summit, President José ManuelBarroso prepared the ground for political agreement on ‘projectbonds’. For the time being, the bond will be solely used forprojects in energy and IT, but when this pilot project succeeds, the concept of a ‘project bond’ might also expand toother areas, for example the area of research and innovation.
Two types of bonds
“You have to remember that it is extremely difficult to gathermember states around the concept of a common bond”, Barrosoconfided to ScienceGuide after his keynote speech at theEurope 2020 summit of the The Lisbon Council in Brussels. “Youmust not confuse these pilot project bonds with the so-calledEurobonds, that aim at the mutualization of government debt.”
In his talk with ScienceGuide, Barroso stressed thepractical and concrete nature of the impulse for knowledgeand innovation he envisages. The European Commission explores theidea of ‘project bond’ in order to establish debt capital marketsas an additional source of financing for infrastructure projectsand at the same time stimulate investment in key strategic EUinfrastructures in transport, energy and broadband.
“What we are talking about here are concrete bonds for concreteprojects, for interconnecting networks for example.” The idea isthat using this method, an upfront investment of €230 million inEuropean funding through specific programmes – like theCompetitiveness and Innovation Programme (CIP) – will be able tomobilize private investments up to €4.6 billion.
No fiscal space
President Barroso stressed that austerity measures mustalways be coupled with growth enhancing measures. “We speak about’growth and creating jobs’, but where will the growth come from? Wewill need some kind of investment and since there is nofiscal space in the member states, we need European investments toboost growth.”
And the ‘project bond’ can become a multiplier of those Europeaninvestments. Does President Barroso see room for institutions ofresearch and higher education in this regard? “Of course they canbecome a partner in such projects. Think of activities in thefield of energy and transport. We would very much welcomethat!”