Public private partnerships in the European Union - the cases of the UK, Germany and Austria

McQuaid, Ronald W; Scherrer, Walter

Abstract

Across the European Union the use of different forms of Public Private Partnerships (PPPs) have been growing, but in different ways and for different reasons across Member States. This paper considers experiences and motivations in three contrasting Member States, the UK, Germany and Austria, where the political contexts differ, but each government currently has a positive view of PPPs. The implementation of the new international accounting proposed by International Financial Reporting Interpretations Committee (IFRIC), and accepted by the European Commission, will have a profound importance on the future use of PPPs. If public sector financial costs are forced to move ‘on balance sheet’ and the future liabilities be counted as a component of national debt, then this is likely to have a profound impact on the participation in PPPs by Member States as it will help remove the current ‘fiscal illusion’ motivating their development. This would change the basis of the choice of using PPPs a more ‘level playing field’ with other financing sources and also give a realistic measure of future public commitments and debt. Hence PPPs would be judged, compared to other financing and implementation mechanisms, on their efficiency and effectiveness basis, rather than on the basis primarily of budget enlargement through a form of ‘fiscal illusion’ as appears to happen currently. The overall conclusion is that if new standards for accounting for PPPs are fully implemented then there may be a reduction in PPPs and a refocusing up their potential efficiency gains.

Citation

McQuaid, R. W., & Scherrer, W. (2008). Public private partnerships in the European Union - the cases of the UK, Germany and Austria.

• Conference Name: 65th International Atlantic Economic Conference
• Start Date: Apr 9, 2008
• End Date: Apr 13, 2008
• Publication Date: Apr 9, 2008
• Deposit Date: Jul 15, 2009
• Publicly Available Date: Jul 15, 2009
• Peer Reviewed: Not Peer Reviewed
• Keywords: Public; private; partnerships; European Union; Uk; Germany; Austria; international finance reporting; fiscal policy; national debt; public sector
• Public URL: http://researchrepository.napier.ac.uk/id/eprint/2763