Problems of financing infrastructure investment in the countries of European Union
Keywords:
infrastructure objects, investment, public sector, private investors, public private partnershipAbstract
Article is devoted to the problems of applied economy connected with needs for considerable financing of infrastructure objects for the European Union. Taking into account the scale of demand measured in tens and hundreds of billions euros the national governments meet some difficulties to supply the demand for a number of reasons which are considered in article. It was offered to divide these reasons into four groups – not predicted or predicted low level of investors’ demand for state debt obligations, cost of the loan capital taking into account all the risks, national and/or supranational restrictions on a deficit budget level and long-term restrictions in fiscal policy. On the other hand, private investors are afraid of problems of time inconsistency and market failures which essences were also presented in article. At first sight, the public private partnership, types of which were described - BOT, BOOT, BTO, BOO, BOMT, DBOOT and DBFO, can be applied as a way out.References
Egert, B., Araujo, S. and Kozluk, T. (2009), ‘Infrastructure and growth: Empirical evidence’, OECD Economics Department Working Papers, No.685.
Infrastructure UK (2010), ‘Strategy for National Infrastructure’, March, p. 5.
European Commission (2011), ‘Proposal for a Regulation of the European Parliament and of the Council establishing the Connecting Europe Facility’, October 19th.
OECD (2006), ‘Infrastructure to 2030: Telecom, Land Transport, Water and Electricity’, June 30th.
Helm, D. (2009), ‘Infrastructure, investment and the economic crisis’, published in D. Helm, J. Wardlaw and B. Caldecott (eds), Delivering a 21st Century Infrastructure for Britain, London: Policy Exchange.
Kessides, I. (2005), ‘Infrastructure Privatization and Regulation: Promises and Perils’, The World Bank Research Observer, 20:1, pp. 82–3.
Ehrlich, I., Gallais-Hamonno, G., Liu, Z. and Lutter, R. (1994), ‘Productivity Growth and Firm Ownership: An Empirical Investigation’, Journal of Political Economy, 102, 1006–38.
Megginson, W.L. and Netter, J.M. (2001), ‘From State to Market: A Survey of Empirical Studies on Privatization’, Journal of Public Economics, 39, 321–89.
Hodge, C.A. and Greve, C. (2007), ‘Public-Private Partnerships: An International Performance’, Public Administration Review, 67:3, 545–58.
OECD (2008), Public–Private Partnerships: In Pursuit of Risk Sharing and Value for Money, OECD Publishing.
Grimsey, D. and Lewis, M.K. (2004), Public Private Partnerships: The Worldwide Revolution of Infrastructure Provision and Project Finance, Cheltenham: Edward Elgar, p. 6.
