The ECB says that public investment is in Europe on minimum values ​​- Aguasdigital.com

                 Photo: EFE

Photograph showing a euro coin of Spain in Duesseldorf, Germany. EFE / File

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             The ECB says that public investment is in Europe on minimum values ​​

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21/03/2016 03:40 (-6 GTM)

                Frankfurt (Germany), March 21 (EFE) .- The European Central Bank (ECB) considers that public investment to gross domestic product (GDP) in Europe is minimal and suggests some countries stimulate given the low interest rates but carefully selected investment projects.
in an article on his new economic bulletin, published today, the ECB said that “public investment in Europe has fallen in recent years, which has led to calls stimulate public in the current environment of low interest rates investment. “
” Since the crisis, public investment has fallen in a number of European countries, particularly those who were pressured by the markets, “according to the authors of the study Marien . Ferdinandusse, Alessandro Giovannini and Igor Vetlov
European countries where more public investment has fallen in relation to GDP are: Croatia, Portugal, Greece, Spain, Cyprus and Ireland, countries with significant fiscal consolidation needs and penalized by the market.
in Belgium, Germany and Austria, which had relatively low levels of public investment before the crisis, public investment or dropped, or has increased.
Finally, public investment has increased in some Eastern countries of the European Union (EU) which benefited from the cohesion funds to be integrated as Latvia, Poland, Romania and Bulgaria.
If low public investment levels are maintained for a period of time, can lead to a deterioration of public capital and reduce long-term production, warns the ECB.
An increase in debt-financed public investment has a positive effect on demand with little effect on the rate debt if investment projects are selected carefully, according to the authors, who used simulation models for their calculations.
stimulate public investment is one way to increase demand in the short term and increase potential output.
Do not forget the ECB that the fiscal positions of many EU countries remain poor and that the stability and growth pact (SGP) require further fiscal consolidation in many of these countries.
in nine countries EU are Bulgaria, Germany, Spain, France, Italy, Luxembourg, Poland, Slovakia and the United Kingdom have guaranteed 43,000 million euros to co-finance projects of European Strategic investment Fund to mobilize private investment but none has directly contributed the capital of the fund.
Juncker called Plan is a package of measures to generate between 2015 and 2017 public and private investment in the real economy by at least 315,000 million euros, 2% of EU GDP in 2015.
public and private investment has fallen in the years after the financial crisis and the sovereign debt crisis.