The European Central Bank published research on how improving the efficiency of public investment could help European Union governments meet rising strategic investment needs despite limited fiscal space. Using transport infrastructure as a case study, it finds technical efficiency of spending is relatively low across EU countries, suggesting scope to achieve comparable network outcomes with fewer resources and thereby free fiscal space. The article notes that strategic investment needs in areas such as digitalisation, infrastructure, climate change and defence are growing while debt and deficit levels remain elevated across many Member States, with public funding requirements for defence and the green and digital transitions estimated at around EUR 510 billion per year. Against this backdrop, transport infrastructure is highlighted as the largest component of EU public investment, accounting for about 27% of public investment and 0.9% of GDP in 2023. Using data envelopment analysis and stochastic frontier analysis, median efficiency scores are estimated at around 50% when benchmarked against transport network density and around 65% when inferred from a World Bank public transport quality indicator, with non-euro area and high debt-sustainability-risk country groupings tending to score lower. Component-level stochastic frontier analysis suggests median efficiency of around 38% for rail and 43% for motorways, and the implied maximum savings from closing the efficiency gap are estimated at roughly EUR 46 billion to EUR 50 billion in a particular year, subject to substantial methodological and practical caveats including non-linear project timelines and delayed realisation of savings. To narrow the efficiency gap, the research points to policy levers such as stronger project management and governance, adoption of public investment management frameworks, improved preparatory-stage quality assurance, better integration of planning and budgeting, and measures ranging from reducing red tape and streamlining reporting to strengthening administrative capacity and governance structures for complex projects.
European Central Bank 2026-04-01
European Central Bank research estimates EUR 46 billion to EUR 50 billion in potential annual savings from more efficient EU transport infrastructure investment
The European Central Bank published research finding that improving public investment efficiency, particularly in transport infrastructure, could help EU governments meet rising strategic investment needs despite constrained fiscal space. Using data envelopment and stochastic frontier analysis, it estimates median efficiency scores of around 50–65% for transport networks and potential annual savings of about EUR 46–50 billion, and highlights policy levers such as stronger project management, better planning-budget integration and enhanced governance.