Update after the EU elections – Implications for financing digital infrastructure

Update after the EU elections – Implications for financing digital infrastructure

The outcome of the 2024 European elections plays a crucial role in shaping the future of broadband deployment across the continent. The priorities to be set by the newly elected officials and parties should significantly impact not only the pace and scope of broadband expansion but also the strategic direction of digital policy in Europe. The coalition that is supporting the van der Leyen Presidency has been confirmed, but there is a significant change in the power relationships among the political forces. The agenda supported by the Greens has been seriously questioned by the electorate, but digital transition has a broad policy support. Nevertheless, the environmental agenda seems to play a key role also for the incoming Commission, although the responsible Commissioners are not yet known.

In any case, the most likely result is a pro-digital transformation coalition as broadband deployment can also englobe the goals of the environmental agenda. There may be enhanced support for policies that prioritize broadband expansion, including increased funding for infrastructure projects and public-private partnerships. The private participation in funding will crucially depend on the evolution of investor sentiment in financial markets that is currently suffering from uncertainties deriving from international instability induced by armed conflicts in Ukraine and Middle East and political outcomes in forthcoming election in particular in the US.

With rising concerns about cybersecurity and data privacy, new European legislation is expected to emerge focusing on secure and resilient broadband networks, leading to unprecedented swap outs of existing infrastructure and other costly remedies. This will reshape the way providers build in the future their infrastructure and how they cooperate with governments. Strategic autonomy will become a key term in the political discussion.

The workshop will discuss how these increasing uncertainties ahead will affect investment incentives for private operators and how governments can help to tackle the increasing financial commitments that infrastructure operators will face in the coming years. Financial markets are challenged to provide appropriate response tools for the difficult times ahead.