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24 February 2012

Connecting Europe: the right direction but still a long way to go

The EU alone will not be able to finance the investment needed to fill the missing links in European energy, telecom and transport infrastructure. It should aim instead at leveraging public and private financing by giving infrastructure projects greater credibility and by lowering risk. This is the message of the European Economic and Social Committee in its opinion on the Connecting Europe Facility, the European Commission's initiative to fund EUR 50 billion worth of investment to improve Europe's energy, digital and transport networks. The opinion is part of a 5-opinion package on pan-European networks that the EESC adopted at its plenary session today.

"The current energy infrastructure must be modernised and expanded to meet demand growth in the future", said Egbert Biermann (Workers' Group, Germany), rapporteur for the EESC opinion on trans-European energy networks. The opinion put forward the idea of creating an energy super-network underpinned by decentralised smart networks. This means building up an EU-wide high-voltage grid for electricity and a high-pressure network for gas, cross-border interconnectors and better storage facilities. An ambitious European infrastructure plan is a sine qua non for doing away with bottlenecks, stabilising energy flows and boosting the security of supply, said the Committee.

The Committee's opinion dashed the hope that many had placed in the rapid advent of CCS technology for capturing and storing CO2. "Research is progressing at a snail's pace and CCS may well not become fully operational by 2020", said Mr Biermann.

In the other opinion on the Guidelines for trans-European transport networks, the EESC looked at synergies between these networks and the EU 2020 Strategy. It said that multimodal and seamless cross-border networks that include "the last mile" and are linked to third countries will be vital for the success of the strategy. They will also be instrumental in reaching aims defined in the 2011 White Paper, Roadmap to a Single European Transport Area. However, Stefan Back (Employers' Group, Sweden), rapporteur, pointed the finger at inconsistencies between strategic, long-terms goals of the proposal and more immediate measures needed between 2020–2030.

In its opinion on digital networks, drafted by Antonio Longo (Various Interests' Group, Italy), the EESC praised the Commission for earmarking some of the funds available under the Connecting Europe Facility to develop broadband, but asked the Commission to focus on projects that boost cross-border interconnectivity and technical interoperability. To ensure compliance with these requirements and keep the public informed, the Commission should draw up a periodical, public report on the use of funds, argued the EESC.

The Committee was perplexed by the Commission's self-granted power to modify projects selected for funding, as it risked exposing the European Commission to unnecessary pressures. "Assessments of political expediency or lobbying pressures should be avoided as far as possible", said the Committee. It was also adamant about the need to respect the "net neutrality" principle and favoured including Internet connectivity in the universal services obligation.

The Committee stressed the importance of ensuring access to the network for all operators, be it in energy, telecom or electricity market, a move that it says will result in better and possibly cheaper services being offered.

As the scale of investment ahead is immense, the Committee embraced the idea of EU bonds for infrastructure projects. "This, together with the Commission's plan to earmark EUR 50 billion from the 2014-2020 budget for connecting Europe should trigger a multiplier effect by leveraging the public and private capital required for investment needs estimated at EUR 1 000 billion", said Raymond Hencks (Workers' Group, Luxembourg), rapporteur for an opinion on the Connecting Europe Facility.

Armin Duttine (Workers' Group, Germany), who penned an opinion on the Project Bond Initiative for infrastructure projects, said that these bonds can play a role in attracting investment in infrastructure projects. However, the participation of private investors impacts on the logic behind investment decision-taking. This is why the decision-taking process should be democratic and transparent and ensure that existing social and environmental norms are respected.

Private investors will not be tempted to take part in the development of network infrastructure unless public incentives and investment return are large and attractive enough for them, added the Committee.

Mr Duttine has also said that the final decision on the 2014-2020 budget should be preceded by a thorough evaluation of the project bond initiative. Civil society should be fully involved in this process, he said.

To find out more, go to the EESC website or contact:

Karin Füssl

Head of the EESC Press Unit

Tel.:+32 2 546 8722

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