European Infrastructure heading for a Multitrillion-Dollar Boost

Nothing would be worse for the future of Europe than to have an infrastructure creaking and groaning as its age begins to show. Which is why a two trillion-dollar cash injection is now being recommended into sectors like transport, energy, and digital communications to make sure Europe remains competitive against the United States and China.

The race is on for the future of Europe. Losing is not an option. It’s an unavoidable commitment that must be stuck to, even if other areas of government spending are being cut back. Critical to achieving this objective will be a partnership between the politicians and the investment community. That will enable ambitious spending targets to be reached and project deadlines to be met.

Keeping Pace With America and China

When it comes to infrastructure, nobody doubts that Europe has some catching up to do.

In contrast, America has been no slouch of late. Over the last four years, the Biden administration has implemented the highest level of federal investment in infrastructure seen for decades. Washington, DC, has been acutely aware that the nation’s economic competitiveness rests on keeping its infrastructure up to date. If you thought that the United States’ domestic networks and communications are not fit for purpose, that perception is way out of date. The reality is that the US has stolen a march on Europe with a multitrillion-dollar boost. Everything from water infrastructure to electrical grids is being improved.

Asia’s economic powerhouse has been busy too. China was already spending 10 times more on infrastructure—in terms of share of GDP—than the US in 2021. The government has lent billions of dollars to construction companies and funnelled funds into local government to build more resilient and up-to-date infrastructure across this vast country. But it’s worth noting that private infrastructure investment remains relatively low, and this is an area where Europe can lead the way.

Europe Gears Up for a Major Infrastructure Spend

Brussels is no longer asleep at the wheel. European policymakers have been paying attention to what is happening in the US and China and alarm bells have been ringing. Political leaders now admit there is no room for complacency across the continent. And they will have no difficulty convincing the public of the need to invest because consumers increasingly demand an infrastructure that is state-of-the-art, especially in areas like digital communication. Everybody wants the very best WiFi and 5G connectivity. It’s almost viewed as a basic human right.

The same principle applies to bridges and roads as well as clean transport. In the latter area, European citizens have witnessed electrical vehicle charging stations sprouting up around them to keep their vehicles going. France has been a leader in this area as an increasing number of drivers switch to electrical vehicles. Operators like Powerdot and Electra have moved quickly to install chargers at EV hot spots like supermarkets and shopping centres. But there is huge scope for improvement on France’s road network, which requires longer-term planning and coordination.