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What can you do about green recovery now

What can you do about green recovery now

What can you do about green recovery now
What can you do about green recovery now 

Green recovery
Encouraging growth requires public and private investment, and this may prioritize sustainable projects

Europe still has to make two important shifts: the first aimed at overcoming the recession and the other that must ensure a low-carbon, resource-efficient, and more sustainable economy. The second has a business plan, but the first is an orphan because of the policies that make it possible. Although the required deadlines are different, they are both fully integrated. Boosting economic growth requires increases in public and private investment, and this could be a preferred destination for those that are compatible with this transition to meeting sustainability commitments.

Of importance is the risk that the European economy will sink, directly in the eurozone, the unexpected change in the position of the European Central Bank. The noticeable deterioration in the economic outlook is more important if the decisions taken can neutralize the risks of recession, or lead to a complete recession. Before the central bank saw the Wolf ears of the Organization for Economic Co-operation and Development, the International Monetary Fund and the European Commission itself revised their growth forecasts downward. The eurozone is unlikely to grow by more than 1% this year and much less than inflation will approach this goal of something less than 2% with the European Central Bank itself. All of their economies, with the exception of Italy and Germany in particular, are suffering from the consequences of the contraction of international trade and the specific problems that can continue to halt the growth of all and even change financial stability.

Faced with such a situation, the European Central Bank was the only one trying to neutralize these risks. Less than three months after the end of bond purchases, the toolbox is opened again to announce the third version of those extraordinary injections of liquidity to banks that were tested during the crisis so that they are distributed between companies and families. Meanwhile, the main benchmark interest rate is postponed, from the current zero.

Doubts are understood about the effectiveness of these decisions in favor of increasing the pace of economic growth and inflation. Now, the main problem in the euro area is not the lack of sufficient liquidity to invest, but the absence of demand. At best, these renewable ECB facilities may be used to continue reducing private sector debt to economies, but it is difficult to increase their investment. However, the emergence of this is absolutely necessary, of course, to generate the potential for a sustainable increase in employment, wages and demand. But not the least of which is the facilitation of progress in modernizing economies, in providing material, technological and human capital. In productivity, in short.

Financial policies that have already been depleted must be fiscal policies that must work to avoid the worst evils. Within it, tangible increases in increases in public investment are more effective in achieving adequate increases in demand than tax cuts. It also stands to reason that given the self-imposed limitations on deficits and public debt within the European Union, those marginal economies over their public finances should do so, primarily Germany. But without prejudice to this, and given the nature of the current risks, European institutions themselves can tackle investment plans that prevent further deterioration in welfare and improve from subsequent generations.

The conditions in today's financial markets, and interest rates lower than the meager growth of economies, not only guarantee the stability of public debt in relation to GDP or even falls, but also fulfill that gold financing rule that, in addition to indicating that investments are not achieved in current expenditures, they Requires that the expected return exceed the cost of the capital with which it was funded. Investments that can guarantee higher levels of per capita income and improve the quality of life. Those that aim to fulfill environmental sustainability obligations fulfill these two conditions. They will allow the attempt to overcome the "tragedy of the horizon" formulated by the Bank of England's current Governor, Mark Carney, who is also Chairman of the Financial Stability Board: Even if we determine the future costs of climate change today, today's decision-makers do not have sufficient incentives to make and neutralize decisions. Their integration with short-term needs should allow these incentives to be modernized.

The European Union itself has estimated that the investments that must be made to meet these requirements, including a 40% reduction in greenhouse gas emissions, created at the United States' summit, will be around 180,000 million annually by 2030. Paris 2015. The structures are Energy infrastructure, improved public transport, building efficiency or specific research and development are destinations through which European institutions can not only make their own investments but also stimulate private sector investment.

A year ago, the European Union published its Action Plan on Financing Sustainable Growth, which relates to linking financing to sustainability. This includes setting criteria for developing "green financing" instruments, with growing roots in financial markets, especially in investment fund portfolios. The analysis of this plan in Spain recently occupied a day at the Bank of England's, as Funseam has done before and a specific document on sustainable financing has been edited by the "Europe" analysis group. They are called "green bonds", the most important of which are the final financing modalities. Along with private issuers, among them some Spanish companies, it will be important for institutions like the European Investment Bank, with an excellent credit rating, to take advantage of the opportunities offered by the markets, and the growing investor preference for these types of securities. 
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