Karl Aiginger: It's inefficiency of governance, not austerity, Europe!

In an op-ed for Le Monde, Karl Aiginger highlighted the inefficiency of European governance as the all-important problem, leading to overriding past priorities and low innovation, the neglect of distributional issues, and a missing vision of Europe’s role in a globalised world. While Karl Aiginger welcomes the New Strategic Investment Fund as a step in the right direction, he cautions its use for large projects rejected rightly in the past, like highways and airports too close to others as well as tunnels.

Karl Aiginger demands that priority should be given to projects where the long run growth effect and short run demand effects are largest: intangible investments like education, innovation, energy efficiency and child care. For these projects it makes sense to expand expenditures over the boundaries set by the fiscal pact.

He calls this the silver rule, in contrast to the golden rule which allows specific deficits for all types of physical investments. Karl Aiginger calls for Europe to streamline and reorient its public sector towards the future, for taxes and incentives to support employment and growth/innovation and for an investment in Europe’s own model of a socially cohesive and ecological economy.