Opening address at the joint CDC-CEB conference on social infrastructure
“Financing social infrastructure in support of inclusive growth in Europe” - Paris, 10 July 2017
Mesdames et Messieurs,
Bonjour et bienvenue à notre conférence concernant les infrastructures sociales. Je suis heureux de vous accueillir ce matin en cette période estivale.
Monsieur le Président Prodi je suis fier de pouvoir ouvrir avec vous cette conférence.
Je voudrais remercier Monsieur le Ministre Sautter et Monsieur Zylberberg de conclure les débats de ce jour.
Enfin un sincère merci à vous Monsieur Lemas, pour l’engagement de la Caisse de Dépots avec la CEB.
Afin de respecter notre emploi du temps, permettez-moi de continuer en anglais.
The theme of this conference is of special relevance to the CEB: the key phrases “social infrastructure” and “inclusive growth” are the focus of the Bank’s activity in general. They are also among the priorities of our Development Plan for the period 2017-2019.
For those of you who may not be so familiar with the CEB, allow me to make some remarks regarding the role of the Bank. Established in 1956 by eight European countries, the CEB is the oldest multilateral financial institution in Europe.
Comprising today 41 member countries from across Europe, the CEB has a unique social mandate and supports social cohesion policies in Europe.
How do we do this? By providing long-term financing and technical assistance for social projects to central governments, local authorities, national development institutions, and commercial financial institutions in our member countries.
Through our work we support economies to grow and spread economic benefits more evenly. Ultimately, as a pan-European institution we contribute to building more inclusive societies in our member countries. In the current environment of youth unemployment, radicalisation and concerns about the impact of globalisation our role is particularly important.
Today Europe is confronted with an ambitious agenda: negotiating BREXIT and mitigating its financial impact; tackling weak economic growth and high unemployment; implementing policies on climate and digitalisation as well as coping with demographic challenges. All of this will need to take place against the background of a more polarised global economy and most likely sustained migrant and refugee movements.
It is estimated that Europe has an annual investment need of Euro 600 billion, 20 per cent of which is needed for social infrastructure investment. Given budget constraints, a comprehensive approach is required to mobilise these funds, including from private sources. In addition, public investment needs have to be clearly identified so that we can make better use of public funding, develop legal frameworks for attracting private funds and, last but not least, decide what role national development banks and European financial institutions should play.
Against this background, education, health and social housing, the subject matters of today’s roundtable discussions, are areas of special importance. Because they are essential for human development. Because investments in these areas can ensure that we meet the basic needs of vulnerable people and facilitate their social and economic integration. Because by giving people, especially young people, a perspective in life we build inclusive societies.
The CEB, for its part, is firmly focused on supporting social infrastructure development in its member countries, through loans, grants and technical assistance.
In health, recent Eurostat data show that 7 per cent of the EU’s population had an unmet need for a medical examination or treatment. Half of those cases were due to financial reasons, long waiting lists or long travel distances. Those more in need are those who suffer the most: low-income persons were 10 times more likely to report unmet medical needs for financial reasons than rich people across Europe.
This is precisely why the CEB has been active in the construction and rehabilitation of health facilities and also in the financing of research, development and training programmes for health professionals.
Regarding education and employment, the figures are equally striking: last year in the European Union there were more than 17 million young people aged 20-34 who were neither in employment nor in education or training. These young persons are especially vulnerable to exclusion and marginalisation, which may lead to radicalisation and extremism. We have seen far too many such examples in recent years.
Through our lending instruments we finance the construction and modernisation of teaching, sports and other student facilities at all levels of the educational system. We also finance training programmes, such as vocational training for those looking to enter the job market.
Last but not least, housing. The recent economic and financial crisis has made access to affordable housing a real challenge for millions of people, with those on low incomes being hit the hardest. For example, in Croatia, Greece and Spain, more than 60 per cent of low-earners spend more than 40 per cent of their income on housing.
Recognising the importance of decent housing, the CEB has made social housing projects for low-income persons one of its priority areas of financing. We believe that access to affordable housing is crucial when it comes to eliminating social disparities and advancing social integration, including the integration of migrants and refugees. In addition to the social aspect of housing projects, energy efficiency improvements can also have significant benefits in terms of meeting environmental goals.
For example, here in France, we have joined forces with Caisse des Dépôts, the SNI Group and Adoma to increase the supply of social housing to disadvantaged groups. Last month we signed a €100 million loan agreement with SNI/Adoma to finance emergency accommodation and reception facilities, along with social support and assistance services, for homeless persons, refugees and asylum-seekers.
And last year we approved a €150 million loan to the Caisse des Dépôts Group to finance investments in the “Young Workers’ Hostels” (Foyers de jeunes travailleurs) for the renovation and extension of some 13,000 dwellings.
Today’s conference is an opportunity to discuss some of the challenges involved in social infrastructure investment in relation to the evolving needs of European countries, and reflect on possible ways forward.
In that respect, I welcome the initiatives taken by the High-Level Task Force on Social Infrastructure to look at current social investment patterns, estimated future needs and possible financing models, and I look forward to the conclusions and recommendations of its Working Groups.
With that in mind, we might consider what more we can do to ensure that we keep up with a changing world. How can we best meet people’s needs in health, education and housing as well as in energy efficiency, telecommunications, and digitalisation? How can we help to increase public and private investment in these areas and attract new investors and what financing methods can we make use of?
I look forward to the insights of our high-level participants on these and other related questions and wish you all a stimulating conference.
Without further ado, I now ask Edoardo Reviglio, who is Chief Economist at Cassa Depositi e Prestiti (CDP), to open the conference with the first round table on the topic “Education and health infrastructure: digital challenges”.