The Great Reset - Contents

Acknowledgements				xiii
Authors’ Biographies				xv
Preface				xxv
Franco Bassanini, Sebastian Dullien, Alberto Quadrio Curzio and Xavier Ragot

Introduction				1
Floriana Cerniglia, Francesco Saraceno and Andrew Watt
	References			13

Part I—Outlook				15
1.	Public Investment in the Pandemic—Europe at a Glance			17
	A. Brasili, A. Kolev, D. Revoltella and J. Schanz
	Introduction			17
	1.1	Government Investment Since the Global Financial Crisis		18
	1.2	Rebuilding Better: The Response to the Pandemic and the Outlook for Public Investment		22
	1.3	The Implementation of Public Investment Plans Determines Their Success		27
	1.4	Will This Time Be Different?		29
	1.5	Conclusion		31
	References			32

2.	From Fiscal Consolidation to the Plan de relance: Investment Trends in France			33
	Mathieu Plane and Francesco Saraceno
	Introduction			33
	2.1	Trends in Public Investment before the Pandemic		33
	2.2	Public Investment during the Pandemic		38
	2.3	The Plan de Relance of September 2020		40
	2.4	Conclusion		44
	References			46

3.	Public Investment in Germany: Much More Needs to Be Done			47
	Katja Rietzler and Andrew Watt
	Introduction			47
	3.1	Public Construction Investment Softened in the Pandemic, Equipment Massively Increased		47
	3.2	Investment Projects under the Stimulus and Future Investment Package: Limited Scope and Slow Progress		50
	3.3	German Recovery and Resilience Plan: Substantial Overlap with Stimulus and Future Package		51
		3.3.1	Overview of the DARP	52
		3.3.2	Climate and Energy	54
		3.3.3	Digitalisation of the Economy and Infrastructure, and of Education	56
		3.3.4	Social Inclusion	56
		3.3.5	Strengthening the Health System and Modernising Public Administration	57
		3.3.6	Overall Assessment	58
	3.4	Substantially Higher Credit-Financed Public Investment Does Not Threaten Debt Sustainability		58
	3.5	What Germany Needs after the COVID-19 Crisis: Reform of Fiscal Rules and Stabilisation of Investment at a High Level		60
	References			61

4.	Relaunching Public Investment in Italy			63
	Giovanni Barbieri and Floriana Cerniglia
	Introduction			63
	4.1	Public Investments in Italy		64
	4.2	The National Recovery and Resilience Plan: Financial Resources for Public Investment		69
	4.3	Conclusion		74
	References			76

5.	Public Investment in Poland			79
	Adam Czerniak and Sebastian Płóciennik
	Introduction			79
	5.1	Historical Background		79
	5.2	Turning Points		80
	5.3	Determinants for Public Investment Increases		82
		5.3.1	Investment Needs	82
		5.3.2	Macroeconomic and Institutional Environment	84
	5.4	The National Recovery Plan		85
		5.4.1	General Information	85
		5.4.2	Five Components of the National Recovery Plan	87
		5.4.3	Macroeconomic Impact of the National Recovery Plan	89
	5.5	Conclusion		91
	References			92

6.	Trends and Patterns in Public Investment in Spain: An Update			93
	José Villaverde and Adolfo Maza
	Introduction			93
	6.1.	Public Investment in Spain: 2000–20		93
	6.2.	Next Generation EU: Some Insights from Spain		98
	6.3.	Conclusion		102
	References			103

PART II—Challenges				105
7.	Crowding In-Out of Public Investment			107
	Luigi Durand, Raphael Espinoza, William Gbohoui, and Mouhamadou Sy
	Introduction			107
	7.1	Modern Estimations of the Fiscal Multiplier		108
	7.2	Conditions under Which Crowding In Is More Likely		109
	7.3	Lessons for the European Union		114
		7.3.1	Public Investment and EU-Financed Investment in the Post-COVID Recovery	114
		7.3.2	The Crowding In Effects of EU Funds	117
	7.4	Conclusion		121
	References			121

8.	Investing in Health			127
	Pierre-Yves Geoffard
	Introduction			127
	8.1	Health		127
		8.1.1	Healthcare and Investment in Healthcare	128
		8.1.2	Recent Crises	129
	8.2	Relevant Investment in Health and Healthcare		130
		8.2.1	Human Capital	130
		8.2.2	Digital Transformations	131
	8.3	Hospital and Long-Term Care		133
	8.4	Industry: Pharmaceuticals		133
	8.5	Prevention		135
	8.6	Conclusion		137
	References			137

9.	Education, Human Capital, and Social Cohesion			139
	Lieve Fransen, Romano Prodi, and Edoardo Reviglio
	Introduction			139
	9.1	Digital Learning: A Boost During the Pandemic but and Increaser of Inequality and Stress on Public Investment		140
	9.2	Reforming Education and Lifelong Learning, and Ensuring Adequate Investment		142
	9.3	New Models for Financing Social Infrastructure for Education		147
	9.4	The Golden Rule for Social Investment, Reforming the Stability and Growth Pact, and Next Generation EU		150
	9.5	Conclusion		152
	References			153

10.	COVID-19 and the Corporate Digital Divide			157
	Désirée Rückert, Reinhilde Veugelers, Antilia Virginie, and Christoph Weiss
	Introduction			157
	10.1	Adoption of Digital Technologies and Their Increased Use after COVID-19		159
		10.1.1	Taking Stock of Digital Adoption	160
		10.1.2	The Dual Impact of COVID-19 on Digital Adoption	161
	10.2	Who Are the Firms Falling Behind? Who Is Forging Ahead?		163
	10.3	Firm Performance along the Digital Divide Grid		166
	10.4	Obstacles to Investment in the EU		169
	10.5	Conclusion		171
	References			172

11.	EU Investment in Energy Supply for Europe			173
	Carlo Jaeger, Diana Mangalagiu, and Jonas Teitge
	Introduction			173
	11.1	The 2030 Challenge		175
	11.2	Employment and Geography		177
	11.3	“There is No Alternative” or Experimentalist Governance?		179
	ANNEX: Background for Tables 1a, 1b, 1c			181
	References			182

12.	Environmental Impact Evaluation of a European High-Speed Railway Network along the “European Silk Road”			185
	Maximilian Zangl (CEU), Katharina Weber (CEU), Muhammad Usman Zahid (CEU), and Mario Holzner (wiiw)
	Introduction			185
	12.1	Life-Cycle Assessments—Calculating the Environmental Burden of HSR Networks		187
	12.2	Methodology for the Environmental Impact Evaluation		188
		12.2.1	Calculating Emissions from Construction	190
		12.2.2	Calculating Avoided GHG Emissions	190
		12.2.3	Factor 1: Difference in Emission Factors	191
		12.2.4	Factor 2: Passenger Shifts from Road and Air Travel	192
		12.2.5	Factor 3: Average Distance Travelled	192
	12.3	HSR Networks as a Step towards European Climate Goals		193
		12.3.1	Impact of Sustainable Construction Practices	195
		12.3.2	Potential CO₂ Emissions Avoided through an HSR Network	196
	12.4	Limitations		197
	12.5	Conclusion		198
	References			199

13.	Cohesion Policy and Public Investment in the EU			203
	Giuseppe Coco and Raffaele Lagravinese
	Introduction			203
	13.1	Disentangling Capital Expenditure from Other Cohesion Items		206
	13.2	Does Cohesion Policy Increase Investment?		210
	13.3	Conclusion		213
	References			214

List of Illustrations				215
List of Tables				223