Interview with Paul Magnette
Minister President Magnette was a speaker in the panel debate on investment and innovation for sustainable development at the Progressive Economy Forum. In this interview, Progressive Economy asked the Minister President to elaborate on some of the ideas he expressed at the Forum.
- The regions play a fundamental role in creating growth. But we still see a lack of investment. Why is investment not coming through? What can be done at regional level to boost investment and attract investors?
One of the reasons is the European Union’s budgetary rules themselves. The Stability Pact is a strong obstacle to investment by the Member States. We have to abide by budgetary discipline, which up to a certain point is quite logical and understandable, but I have pleaded many times with the European Commission for a distinction between the expenses which are current expenses, on the one hand, and investments, on the other hand. Within the investments, those which are in line with Agenda 2020 and which are modernising our society, in terms of mobility, renewable energy, should be considered differently from other expenses, and Member States should be encouraged to make that kind of investment. I think everybody is asking for that today - the IMF, the OECD, the G20, everybody is asking the EU to invest and the EU is preventing its Member States from investing, which is quite a paradox.
- EFSI is the core project at European level in creating a fruitful public-private partnership which can create investment and innovation. As Mayor and Regional President, do you think EFSI has the potential to make a real difference? Is the leverage ratio big enough? What else should be improved in the way EFSI works?
It’s interesting, but first of all it’s a pity it is limited to or concentrated on private investment, because we would need to support public investment too if we want to modernise social housing and reduce the consumption of energy by the people who live in social housing, if we want to modernise schools etc. The EU should be a strong supporter of those kinds of things; it would help to fight climate change and modernise our society and support the economy at the same time. So such a focus on the private fund is a pity - it’s a first limit. And second, the real money is very limited. They rely on the leverage effect, which exists up to a certain point, but they have less than 20 billion euros of real money - the rest is guarantees, leverage effect, that kind of thing. The European Central Bank is creating 1000 billion euros to support growth in the EU. Instead of injecting that money in the bank system, we should create a new European fund with 1000 billion euros and use this fund to support real investment in the Member States.
- What does the European Union need to change in order to promote investment and innovation? What can the EU do to be a strategic actor?
Of course we have to support innovation, but not just innovation. I think we should support everything that leads to ecological modernisation, so we can support renewable energy, we can support mobility - trains, buses, all kinds of public mobility in the cities - we can help the cities become smart cities. Europe really needs to modernise its infrastructure - we spend so little in terms of public investment in infrastructure these days, compared to what we did in the 1970s or even the 1980s, so we really need to relaunch all that in line with the priorities of the Agenda 2020. Smart and sustainable growth can be supported by those investments.
- What is the key to a comprehensive strategy between European, national and regional levels?
It’s not that complicated - we have lots of experience. We have the experience with the European and Regional Funds - the FEDER, the Cohesion Funds - we have a long tradition of these funds. The EU defines a number of priorities, then we have an operational programme, which is a contract between the region and the EU, and which defines the great axis of the strategy that we want to sustain. And then we have co-financing to make sure that Member States also invest from their own budget to support those objectives, and this is reviewed by the EU in the normal process. We have been doing that for so long that we have no excuse not to do it again.
The Minister President’s participation in the Forum can be viewed on the Progressive Economy website: