EUREAU PP on Financial Perspectives 2014-2019/2021

Over the next few years, the European Union commitments and policies regarding the water sector will have to take into account a new macroeconomic reference scenario demanding that the European motor be restarted after the world crisis. First of all it will be necessary to complete the recovery programs undertaken, at the same time seeking to avoid falling into the trap of increased inflation and public indebtedness and acquiesce to demagogic and populist demands.

While the objectives, above those of an environmental nature, already appear to have been defined by the European lawmakers, the paths along which they are to be pursued must be carefully scrutinized in order to align them with the current scenario.

In the opinion of EUREAU this situation has two practical consequences, as will be described in the following.

On the one hand it is necessary to increase the efficiency of the management organization system referring to water and to water services in general, reducing costs and containing the public deficit. On the other, in view of the highly transversal nature of the subject, it will be necessary for each stakeholder operating on the European stage to play his role as indicated, thus guaranteeing an overall harmonious economically and environmentally sustainable growth.

Moreover, we know from experience that the persistence of distortions and asymmetries will lead to future systemic inefficiencies that sooner or later will necessitate corrective and recovery action. It follows that policy guidelines and incentives must be focused on precise objectives and rules of behavior so as to avoid maintaining inefficient status quo situations. The forthcoming negotiations to be undertaken at European level, whether pertaining to technological innovation support policies or to the CAP itself, must take all this into account.

Considering the possible contribution from water sector for “restarting” EU economy, the following points have to be highlighted:

• For meeting the environmental and social high level requirements set up by EU policies, important investments in water infrastructures are needed, but these must not be considered as only charges: they are typically contra-cyclic, and therefore may contribute positively to economy; they should be favored in the effective use of EU cohesion and development funds;
• As it has been stressed by UN considering Millennium Development Goals, these investments are a key condition for public health and for environment protection, and more broadly for any development of the societies;
• In a period where EU promotes innovation, it has to be stressed that water sector is a good vector for innovation, notably regarding the key issue of water and energy.