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Italy's Tremonti Plan:
`We Must Act Now'

June 9, 2003 (EIRNS)—The Italian government today presented a proposal to relaunch infrastructure investment in Europe. The paper, titles "A European Action Plan for Growth," sets two deadlines: the first, at the next Ecofin Council in mid-July in Saloniki, where the Commission and the European Investment Bank (EIB) will present a mandated proposal, taking into account the work of the Van Miert Group; the second in December, where the report should be ready and endorsed by the European Council in Brussels. The paper was first presented at an Italian cabinet meeting today, together with a draft on "Italian Priorities for the EU Semester," which calls for opening "a new phase in the conduct of economic policy in Europe, focussed on growth."

The paper states that the "social model" for the next years "is based on public goods within a market economy" and that "the revitalization of the European economy must rely on public investment—mainly, but not exclusively, in infrastructures and transportation. Also non-material infrastructures are required: human capital, research, technology." Introducing the "European Action for Growth" plan, the paper explains that it "is grounded in its first phase on two pillars: The first pillar is a new scale of priorities for infrastructure investment at the European level with emphasis on trans-national, but also national, investments that can be financed through market instruments. The second pillar is the development of a European Financing Facility, based on the creditworthiness and know-how of the European Institution in charge of infrastructure development: the European Investment Bank."

The Action Plan itself starts with a call: "We must act now," and states: "Trans-European Networks (TENs) play a key role in supporting the economy and increasing long-term growth potential. The current rate of investment in TENs is insufficient to overcome the backlog of investment in the agreed list of priority projects. At the current annual rate of investment of 25 billion euros per annum, it would take some 20 years to meet the target investment amount of up to 500 billion euro estimated for a modern and pan-European network of priority links in transport and energy.... There is a need to accelerate the volume of investments in infrastructure, bringing them back to the pace initially targeted by the Delors Plan. This would imply an increase in such investments in the order of 0.5-1% of GDP.

"Financing issues explain a large part of the delays. In particular, investment schemes where the financial or even the economic viability is uncertain, of a deferred nature, or where network and external benefits cannot be adequately captured in revenue streams, generate a high need for grant support....

"The Commission should also seek to identify priority projects that can make a significant early contribution due to their timing, feasibility and economic importance.

"Work should proceed to extend the scope of projects also to non-material infrastructure, human capital, R&D, high technology."

[See also Claudio Celani's article, "Italy's `EU New Deal' Push Reflects LaRouche."]

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