WRITTEN QUESTION E-1392/01 by Christopher Huhne (ELDR) to the Commission. Public investment.
Date: 2001-05-10
Institutions: European Parliament, Provisional data
Subjects: cost-benefit analysis, project evaluation, public investment

C 364 E/98

Official Journal of the European Communities

EN

20.12.2001

(2001/C 364 E/106)

WRITTEN QUESTION E-1390/01

by Christopher Huhne (ELDR) to the Commission

Subject: Comparative assessment of education systems

(10 May 2001)

Does the Commission agree that the standard of education in the European Union is a key determinant of
long-run economic performance? Will it provide a rank ordering of the Member States from first to last in
the following objectively assessed criteria, and state the figures supporting those
terms of each of
judgements in each case? Adult literacy; proportion of workforce with vocational qualifications for skills;
standards of mathematics attainment; ability to speak another language; years in full time education;
minimum school-leaving age; proportion in higher education.

the Commission add any further objective criteria it

Will
assessment of education systems?

feels may be relevant

to a comparative

Answer given by Mrs Reding on behalf of the Commission

(16 July 2001)

The Commission believes that raising the standards of learning is essential if Europe is to become a more
competitive and dynamic society and its citizens are to be better able to develop their own skills and
competences and realise their potential as citizens, as members of society and as economic agents.

The Commission, however, does not believe that the objective of quality assessments is to define ranking
between countries or a common concept of quality of education. Its aim is rather to identify areas within
which comparisons between countries could be made in order to identify good practice, exchange
experience and define main policy challenges.

In the Report of the Commission on Quality of School Education, sixteen indicators were identified. A
follow up is presently being made in order to identify a limited number of indicators on quality of lifelong
learning. This initiative has been taken in co-operation with experts from more than 30 European
countries.

Indicators play also a central role in the open method of co-ordination and in the detailed work
programme for the implementation of the (cid:145)Report on the Concrete Future Objectives of the Education and
Training Systems(cid:146), which was transmitted to the Stockholm European Council of March 2001 by the
Education Council on the basis of a proposal from the Commission (1). Indicators will be integrated as
appropriate in relation to all the objectives of the report and especially in relation to three priority areas:
Basic skills; Mathematics, Science and Technology; and Information and Communication Technologies
(ICT). Following the Stockholm conclusions a Joint report from the Council and the Commission will be
transmitted to the Barcelona Summit, at the beginning of 2002. In this report a choice of indicators to
monitor developments and support the exchange of experiences between the Member States will be made.

(1) COM(2001) 59 final.

(2001/C 364 E/107)

WRITTEN QUESTION E-1392/01

by Christopher Huhne (ELDR) to the Commission

(10 May 2001)

Subject: Public investment

Does the Commission agree that the investment that secures adequate rates of return should be undertaken
whether in the public or the private sector? If so, what is the justification for including public investment
in the targeted measures of public borrowing? Why not merely ensure that public investment does indeed
earn suitable ex ante and ex post rates of return?

20.12.2001

EN

Official Journal of the European Communities

C 364 E/99

Answer give by Mr Solbes Mira on behalf of the Commission

(10 July 2001)

The Commission would agree that investments securing adequate rates of return should be undertaken in
both the public and the private sector. It also believes that the public sector must do its best to contribute
to the accumulation of capital within the economy and to promote economic growth (1). The level of
investment must, however, be compatible with the principle of budgetary discipline and cannot therefore
conflict with budgetary constraints, and in particular those imposed by the Stability and Growth Pact.
These constraints, which are intended to restore balance to the budget in the medium term, will also create
room for increased expenditure on government projects, by reducing the burden of public debt.

To evaluate projects in terms of performance and decide whether the public sector should shoulder the
costs, government bodies apply the techniques of cost-benefit analysis. Various methods are used, some
taking account of budgetary availabilities.
In any case, the profitability criterion must be viewed in
conjunction with budgetary considerations so that there is no risk of exceeding the limits imposed by
budgetary discipline.

(1) See the Communication from the Commission on (cid:145)The Contribution of Public Finances to Growth and

Employment: Improving Quality and Sustainability(cid:146), COM(2000) 846 final.

(2001/C 364 E/108)

WRITTEN QUESTION E-1393/01

by Christopher Huhne (ELDR) to the Commission

(10 May 2001)

Subject: Public investment in the Member States

Will the Commission describe the principle hurdle rate for public investment applied by each Member
State government? If there is more than one hurdle rate, will it describe the rate also applied to transport
infrastructure projects? Does the prospective flow of returns with which the hurdle rate is compared
include social costs and benefits, and if so will the Commission provide a brief description in each case of
the procedure and the key values attributed to time-savings and avoidance of deaths?

Answer given by Mrs de Palacio on behalf of the Commission

(13 July 2001)

the practice of many Member States for transport

The Commission understands that
infrastructure
investments is to (cid:145)discount(cid:146) future costs and benefits to establish a (cid:145)net present value(cid:146) rather than use
a single minimum hurdle rate (cut off rate). While this approach can be used in a strictly financial analysis,
the assessment framework most commonly used is that of social cost-benefit analysis. Here, capital costs
are compared with maintenance, vehicle operating, time and accident costs savings. In some Member
States environmental damage costs are also monetised whereas in others these and other broader impacts,
such as land use or regional economic development, are often taken into account as complementary,
qualitative information.

The discount rate normally applied in the cost-benefit analyses in the Member States varies between 3-8 %
on real (inflation adjusted) costs and benefits.

The Member States use a wide range of definitions, modal coverage and values for time savings. Using
harmonised definitions, the range provided by the EUNET (1) project is between € 6,3-23 per hour (h)
(1995 prices).