Managing a european recovery: The case for public spending for an energy transition

The public debate about a European economic recovery has atrophied in a stimulus vs. austerity, north vs. south blame game. Far too little attention is devoted to the question into which kind of investments stimulus funding should be channelled and what a long-term sustainable European recovery may look like. This article argues that public debate should shift from un-constructive criticism to constructive engagement. It suggests that instead of expanding funding to prop up ailing or outdated business models, Europe should adapt to the shifting centres of economic gravity, harness its comparative advantages, and manage its recovery by developing alternative energy technologies and building a concomitant industry. Europe will have to recognise that the private sector cannot accomplish such a recovery alone; overcoming market barriers to developing new economic sectors requires a sustained political commitment. In the long term, such an approach to recovery promises to deliver energy security and a more sustainable energy system, the creation of a viable export sector, and many new well-paid jobs with more equitable economic benefits than are offered, for instance, by the financial sector.