To prevent collapse

Telecommunications, energy, electricity, roads, railways, water: these are the great infrastructural systems that are common to all countries and today they are particularly complex and interconnected as far as Europe is concerned, with its thirty or so different nations and its particularly intricate geography. What challenges await Europe in the decades ahead? The question was discussed at the recent international forum promoted in Rome by the ESEF (European Service Economic Forum) with the title “Regulation and investments for infrastructural development”.THE “STRESSES” THAT AWAIT US. Never before has the problem of infrastructures assumed such a “global” dimension as it does today. Europe, with its over thirty nations, languages and cultures, is called to make a concerted effort to re-organize, modernize and coordinate its main infrastructural networks (railways, ports, airports, canals, water basins, telephonic networks, gas pipes). The failure to do so will cause blockages and bottlenecks so serious as to delay Europe’s overall development and lead to growing percentage reductions of gross domestic product (GDP). According to BARRIE STEVENS , assistant director of the development programmes section of the Organization for Economic Cooperation and Development (OECD), “within a time frame of some twenty years, i.e. by 2030, the main European infrastructural systems and those of the Mediterranean area will be subject to particularly accentuated stresses”. “It’s enough to think – he said – of the ‘cascade’ effects of the ‘water stress’ that affects the main European countries facing onto the Mediterranean (Spain, Italy, Greece) as well as those of North Africa and the Middle East”. This deteriorating water situation will have “ruinous” consequences, unless robust international investments are made in aqueducts, water purification and desalination plants: it will lead, among other problems, to sharp emigration from the zones most subject to ‘stress’ in terms of water shortages. The repercussions for Europe – as is easy enough to imagine – will be particularly damaging from every point of view: human, social, environmental, economic, political, and in terms of employment.EUROPE “OBSTRUCTED”. On the other hand, OECD’s forecasts on world economic growth do not seem negative, quite the reverse. Again according to the data furnished by Stevens, in the hypothesis of “accentuated globalization”, the growth of GDP in the EU in the period 2006-2025 is set to grow annually by an average of 1.8%, against 2.8% in the USA, 1.5% in Japan, 7.5% in China and 6% in the non-OECD countries. In the hypothesis of “moderate globalization”, these percentages will be reduced: 1.6% UE, 2.5% USA, 1.4% Japan, 7% China, 5.5% non-OECD countries. These increases are rather significant for the “rest of the world”, with the exception of Europe that is showing a singular “slowness”, depending, in Europe’s case, not on the European industrial system, which is highly developed, but on the backwardness, old age or inadequacy of Europe’s main infrastructural networks and their lack of “interconnection”. DYNAMIC GROWTH OF OTHER AREAS. In essence, while the “structural blockage” of continental Europe will lead to a growth of the movement of goods between now and 2050 of the order of 10%, over the next 40 years, by contrast, we should witness exponential growths for such areas as Eastern Europe (+ 27%), Latin America (+28%), Africa (+31%), China (+33%), Asia (+37%) and India (+38%). Such standards of growth at the world level imply for Europe in particular the need to plan investments in the modernization and boosting of its own networks of the order of hundreds of billions of euros. For such investments – said JAMES DOUGLAS HAMILTON , of the department of infrastructure funding at Rothschild – huge capital sums are available, but these need guarantees of public and normative type if they are to be used in a productive way. The same goes for telecom networks and Internet broadband systems. The investments needed at the world level are astronomic: OCDE calculations suggest 800 billion dollars investments in roads, 150 billion in railways, 1500 billions in telecoms, 600 billion in electricity, and 2200 billion in water. At the European level too water is the paramount sector: between now and 2025 water investment will absorb 400 billion dollars, in contrast to 80 for railways, 1250 for roads and 75 for electricity. According to ANTONINO LO BIANCO , head of the “infrastructures for Europe” department at Babcock & Brown, Euro-Australian company that administers infrastructure funds in five continents, the pension fund instrument seems suitable for planning, alongside other institutional investors, long-term European infrastructure modernization programmes. The necessary condition for this is that the various countries regulate their own concessionary and normative systems, unify them and thus make investment more attractive, remunerative and capable of generating profits not only for shareholders but for the whole financial and entrepreneurial system.