Stop bashing public finance. Public institutions are vital to global innovation. That's the message from world-class economist Mariana Mazzucato in an interview with the European Investment Bank. The University of Sussex professor visited the EIB to discuss public investment and her book "The Entrepreneurial State and the Role of Public Banks".
For Professor Mazzucato, public institutions foster innovation with long-term finance, whereas private finance often focuses on relatively quick profits. To ensure the survival of the EU, she urged the need for an innovation-led investment strategy with the public investment of the EIB assuming a central role.
"Europe got sick, because we no longer believe in the public sector," Mazzucato says. "But we should be reinvesting in the public sector, then striking healthy deals with private business."
"Private investment is often risk-averse. Innovation needs patient, long-term committed finance."
She also underlined the EU bank’s role as the global leader in market-relevant climate finance. Green growth offers immense potential for innovation, and public investment has a leading role to play in forging development in this area.