After Corona, large-scale investment will be necessary to transition the European economy towards sustainability and resilience. How can we ensure that this investment takes place effectively, at the required scale, and with sufficient democratic oversight?
To these ends, a dedicated entity could be created: a European Investment Agency (EIA). Its mission would be to plan, finance, and oversee the reconfiguration of European communications, energy, food, and transport networks for sustainability and resilience, as well as to support onshoring efforts in pharmaceuticals, personal protective equipment (PPE) production, and other strategic value chains. The EIA would be staffed by planning and legal experts familiar with national planning legislation, engineers with relevant specializations, and infrastructure finance experts.
The EIA could be integrated with national and regional planning bodies, which could either be existing structures, such as transport and energy ministries, or newly created Transition and Resilience Councils (TRCs). These could be elected or selected by sortition from the relevant electorates, paying close attention to fair representation by gender, race, and other relevant dimensions. To ensure a productive balance between coherence and decentralisation, the EIA could plan and majority-finance continental-scale projects itself, while at the same time ensuring that national and regional projects drawn up by the TRCs nest into overarching strategic plans drawn up jointly by the EIA and the TRCs. To further embed democratic voice and accountability, the EIA could be overseen by the European Parliament, or by a dedicated supervisory body with members drawn from the TRCs or national parliaments. Financing could be secured through issuing bonds backed by the ECB, through general tax revenue, and, where appropriate, through revenues from projects. On political grounds, a financing structure akin to the US Highway Trust Fund can also be envisaged.
Besides driving the necessary resilience and sustainability investments after Corona, the EIA would also serve to create and maintain strong state capacity in infrastructure and supply chains, in preparation for crises or other future developments necessitating major reconfigurations in these areas. In addition, to ensure that public investment after Corona is not just sufficiently resilience- and sustainability-oriented (as well as macroeconomically sufficient), but also fair and just, priority should be given to projects that reduce wealth-, income-, prestige-, and power-inequalities, in particular between men and women and between ethnic majorities and minorities.
This proposal links to Strengthening the Secondary Mandate, Onshoring Essential Industries, and a Sustainability and Prosperity Pact as part of the wider institutional architecture an EIA would be embedded in. It also links to Updating National Accounting to evaluate EIA projects and programmes, and to assess where investment is most urgently needed.