Public Finance Management

This week, Mario Draghi submitted his seminal report on European competitiveness to the EU's political leaders. I hope its findings will shape the agenda of the next European Commission and across European capitals because its core message is one that I believe is essential: Europe needs to boost private and public investment in security and the digital and green transition to ensure future competitiveness. The report confirms that the EU was late to #digitalization and is still not reaping the enormous benefits it offers in terms of #innovation, productivity, and growth. But it also clearly shows that Europe can quickly catch up by adopting proven, state-of-the-art solutions – and that's where Europe should be heading now. Thoroughly adopting cloud solutions in the private and public sector would go a long way already to #modernizing our companies, societies, and governments. We'll get there much faster when we unify fragmented digital markets (across the EU27, as well as inside key countries such as Germany) and by putting digitalization at the top of the political agenda. This will lay an important foundation for our ambitions to catch the next big opportunity for Europe and become a world leader in #AI for industrial applications.   The Draghi Report offers a blueprint for the future – now it’s up to us to take its findings seriously and implement the best recommendations at speed and at scale.  https://lnkd.in/epJaDJQk

Excited to share my latest piece for the International Institute for Strategic Studies on American state capitalism and critical-mineral diplomacy. Since January 2025, the Trump administration has moved decisively toward a more forceful, state-led approach to securing critical mineral supply chains—accelerating permits, brokering private capital, and deploying public financial institutions as strategic tools. China’s April 2025 export controls and licensing restrictions only reinforced this shift, helping trigger a surge of U.S. public investment into rare earths and other critical inputs. In the article, I argue the U.S. strategy now runs on three tracks—launched in stages but increasingly intertwined: 🏈 “America First” deals that deepen state involvement in domestic projects; 🤝 Bilateral agreements abroad, backed by government finance and public–private partnerships; 🌍 Pax Silica, a coalition-of-capabilities framework linking capital, reserves, processing know-how, and downstream demand across allied jurisdictions. Together, these tracks aim to secure “reliable supply chains and access to critical minerals,” now framed as a national-security priority. The real test is execution—and whether coalition-building can hold when it is paired with tariff threats and other leverage tools that strain transatlantic and wider allied trust. #EconomicSecurity #CriticalMinerals #RareEarths #Geoeconomics #IndustrialPolicy #SupplyChains #StateCapitalism https://lnkd.in/dJfPeKDh

Relatively small amounts of critical minerals underpin trillions of dollars in economic value globally. New IEA analysis highlights growing risks, including export controls, although countries are also taking steps to make supply chains more secure 👉 https://iea.li/4aTpQ33 The geographic concentration of critical mineral supply chains continues to grow, particularly for refining. Rare earths are the exception. The top supplier's share fell from 90% in 2023 to 85% in 2025, showing progress is possible with strong policies. Read more in the International Energy Agency (IEA)’s Global Critical Minerals Outlook 2026 👉 https://iea.li/4bNpwDh While critical mineral projects are being announced & developed across the globe, we see a structural imbalance in diversification efforts. Investment outside the dominant supplier remains concentrated in mining, while efforts to expand refining & downstream capacity lag behind. In a complex geopolitical environment, critical minerals have moved to the forefront of countries’ energy, economic & national security agendas. This is making a difference: public finance commitments more than quadrupled between 2023 and 2025, reaching $65 billion. New IEA analysis also sees a major opportunity to diversify supplies of strategic minor minerals. The investment needed is much smaller than the potential risks of disruption and can be seen as economic insurance. Since #CriticalMinerals account for a small share of final product prices, the cost of diversification could have a limited impact on consumers. For example, critical minerals account for around a quarter of battery cell costs but only about 3% of the price of an average EV. Diversified supply is not only a matter of investment: it also means tackling gaps in technology, equipment & workforce skills. Our new Global Critical Minerals Outlook 2026 includes guidance for policymakers on this & more. Read it in full on our site 👉 https://iea.li/4bNpwDh

First they ditched Microsoft. Next comes Google. Then Meta. Europe’s quiet tech revolution has begun — and it’s about sovereignty, not software. Ive adressed this several times before and its now in motion. U.S. tech dominance in European government IT is eroding fast: 🇩🇪 Schleswig-Holstein: migrating 30,000 public workers off Microsoft Office & Windows to Linux + German cloud. 🇩🇰 Danish Digitalisation Agency: abandoning Microsoft Office for LibreOffice; pushing local hosting over Azure. 🇳🇱 Dutch Ministry of Justice: banned U.S. cloud services for sensitive data since 2022. 🇫🇷 French public sector: deploying open-source alternatives to Teams and Google Docs. 🇸🇪 Sweden, tensions are rising: the Tax Agency wants to move sensitive data to Microsoft’s cloud — but the Enforcement Authority says it may violate secrecy laws. Why? Because 98% of Europe’s public digital infrastructure is run by foreign tech — mostly U.S. giants under the CLOUD Act. ✅ That means Washington can legally demand access to European public data, even if stored in EU datacenters. ✅ EU’s cybersecurity agency calls it for what it is “strategic vulnerability.” ✅ A 2024 poll found 73% of EU IT leaders are actively seeking to de-risk U.S. dependencies. Eurostack. This is a pan-European initiative led by Cristina Caffarra to replace U.S. digital platforms in public administration: ✅ Not just Microsoft and Google Workspace. ✅ Also YouTube, Meta, Zoom, and Slack — all under scrutiny. ✅ Target: public sector communications, citizen platforms, school systems, internal messaging. ✅ Think “Schengen for cloud” — where data stays in Europe, under European control. The implications are massive: ✅ €52 billion/year of public IT contracts could shift to EU-owned platforms. ✅ European open source and cloud industries gain strategic funding. ✅ Social media platforms face new barriers in education, governance, and public media. ✅ U.S. leverage over Europe — via digital kill switches — begins to fade. The next time you hear “It’s just about productivity tools,” remember: You can’t outsource your tech stack and still claim you’re sovereign. 🇪🇺 EU has finally woken up 🙏 . The U.S. cloud party in Brussels is hopefully finally over. And there are plenty of EU companies that can do this soooo much better

I am excited to share the second article in my series on pension reforms, titled "Deferred Dreams: Navigating Pakistan's Public Sector Pension Crisis" for Consortium for Development Policy Research. This piece goes a step deeper into Pakistan's escalating pension crisis and explores valuable lessons from global pension reform experiences that can benefit us. Pension reforms are complex and fraught with challenges everywhere, but more so in a context like ours, characterised by polarised politics and fiscal instability. However, as history has shown, transformative reforms are possible. By learning from countries that have successfully transitioned from unsustainable pay-as-you-go systems to financially stable contributory schemes, we can find a way forward. In this article, I examine the pioneering model of Chile, which was way ahead of its times and drastically transformed its pension landscape under the guidance of José Piñera in 1981. The article also looks into India's phased approach to pension reform and its establishment of a robust regulatory framework with the Pension Fund Regulatory and Development Authority (PFRDA). Key takeaways from these global examples include the importance of: - Shouldn’t be too hardwired or prescriptive: Implementing a flexible and evolving pension system - Blessing in disguise: Utilising periods of economic or fiscal crisis to drive reforms - Build trust: Establishing strong regulatory frameworks to protect pensioners' savings - Transparency is the key: Building consensus and trust through transparency and stakeholder engagement - Go for a multi-pillar structure: Combining public pension contributions, voluntary private savings, and occupational pensions to distribute financial risks Drawing on these lessons, I propose broad contours for overhauling Pakistan’s pension framework, ensuring it meets the needs of our rapidly growing public sector workforce. Stay tuned for the final piece in this series, where I will outline a new pension system structure tailored for Pakistan. Read the full article here: https://lnkd.in/gRxm3adG #PensionReform #PublicSector #FiscalSustainability #Pakistan #GlobalInsights #PolicyReform #EconomicGrowth -- Hasaan Khawar email: hasaankhawar@gmail.com | tel: +92 300 402 9997  Skype: hasaan.khawar | Twitter: @hasaankhawar

Continuing this short series on Europe’s pension challenge, each country brings a different perspective. In France, we often approach pensions as a binary debate : pay-as-you-go versus capitalization (or solidarity mechanism versus markets). This is the wrong lens. All international evidence points in the same direction: the most resilient systems are hybrid. And yet, France still relies on pay-as-you-go for more than 95% of retirement income. At the same time, the demographic equation is deteriorating rapidly: the ratio of contributors to retirees is expected to fall to 1.4 by 2070. So the question is no longer if we need capitalisation. It is how we build it. Transition must be gradual, inclusive, and collective. We already have strong foundations: - nearly €230bn in employee savings and retirement assets - millions of savers engaged through company schemes - proven mechanisms combining performance and long-term discipline The next step is acceleration, in a context where (i) resources are scarce (ii) the State can’t afford to spend more money. Still, public authorities will need to calibrate the proper transitioning to ensure the weight of the system rebalancing is not disproportionally beard by some generations (loss of pension rights, additional contributions from individuals and/or employers, employer top-up…) To make it right, we need to scale both collective savings - through employers - and individual savings, with the right incentives and clarity. A first simple measure is to partially redirect allocated annual money from medium term collective savings (PEE) to Retirement (PER). As insurers and asset managers, we carry a responsibility: to make these solutions accessible, understandable and efficient over decades. Because the objective is simple: preserve our social model by modernising it. Virginie Korniloff, Virginie Delaunay, Emmanuel Gendreau Nicolas Deschamps (He/Him)

A working group in the European Parliament wants to take action to grow the organic market in support of the EU goal of 25% organic in all EU farming. Today I presented lessons from Denmark on how we moved organic food from niche to mainstream in supermarkets, achieving the highest organic market shares in the world: 30-60 % organic for many basic foods like milk, eggs, flour and many fruits and vegetables. I also shared how we developed organic public procurement, reaching 60 and even 90 percent organic in cities like Copenhagen. It is so positive that the European Social and Economic Committee recognizes the benefits of organic farming for nature, drinking water, resource efficiency, climate and not least farm incomes and rural resilience. And that if we want more organic farmers, we need to grow the market. There were strong arguments, not least from Eduardo Cuoco, Director IFOAM Organics Europe for how organic farming benefits farmers and rural communities and is more resilient and self-reliant, in relation to the type of economic shocks and trade crises we are experiencing now. Among the lessons and recommendations I shared were: ✅ Market growth requires a combination of 3 elements: strong policy, market partnerships and capacity building in organic sector organizations, as catalysts for action and collaboration. ✅  There are a wide range of policy measures that are proven effective in developing the organic market and growing organic in schools, hospitals, military barracks and all public sector meals. I shared many of these. ✅  Now that all EU member states have goals for organic farming, they need ambitious goals in CAP strategic plans for organic market growth and public procurement. ✅ A key missing element in most EU nations is capacity in the organic sector organisations to unite the organic producers and supply chains, partner with retailers and drive organic market growth. Together they can move mountains! ✅  Small public investments in organic sector organizations allows them to leverage sales platforms in retail and food service far beyond what any campaigns can deliver. ✅ Partnerships with retailers is the most impactful element. They make organic available, visible, affordable and meaningful for consumers. Democratizing organics. ✅  Public procurement requires strong local and national goals, investments in education in kitchens and labelling for documentation and pride in the kitchens. Partnerships with cities, wholesalers & kitchen workers unions drive transition. ✅ We need gamechangers that level the playing field in the market, like lower VAT on organic food, and fees on pesticides & fossil-fuel based synthetic fertilizers, so prices reflect environmental costs. Thank you Henri Delanghe, Organic Unit in the Commission, Eduardo Cuoco, Wolfram Dienel, German Farmers Assoc & COPA COGECA, Barbara Koecher-Schulz, AGRARMARKT AUSTRIA MARKETING GESMBH, & Claudio Serafine, Organic Cities Network Europe for the great points!

The European Commission's 2026 study on the climate transition and public finances arrives at a conclusion that should reframe board-level thinking on sustainability risk: a net-zero trajectory is fiscally sustainable, but the path there will fundamentally restructure how governments raise and spend money. The analysis, conducted using two independent macroeconomic models across all EU member states, finds that revenues lost from declining fossil fuel taxation are more than offset by new income streams, including ETS1, ETS2, the Carbon Border Adjustment Mechanism (CBAM), and the removal of fossil fuel subsidies. The fiscal arithmetic can work. What differs is the distribution of the adjustment. Several findings demand the attention of sustainability leaders, CFOs and board audit committees. The International Monetary Fund estimates climate-related public spending could increase sovereign debt by 10 to 15% of GDP by 2050. Delayed carbon pricing adds a further 0.8 to 2% of GDP annually. For businesses operating across EU jurisdictions, sovereign fiscal stress is not an abstract risk. It translates directly into tax policy volatility, subsidy withdrawal and regulatory uncertainty. Carbon pricing alone could generate revenue equivalent to 0.9% of GDP by 2050, but tax base erosion reduces the net figure available for balancing to just 0.4% without complementary measures. Corporates relying on current tax structures to model long-range cost bases are working with assumptions that will not hold. Member states are not starting from the same position. Poland and Romania remain heavily dependent on EU financing to fund their transition, whilst Denmark and Spain are mobilising domestic public and private capital at scale. Supply chain exposure to high-dependency member states carries regulatory and operational risk that boards should be stress-testing today. The broader message is clear: the transition does not threaten fiscal stability, but it will demand active management of the revenue and expenditure shifts it triggers. Companies that treat this as background noise rather than a strategic input are accepting avoidable risk. Understanding the intersection of climate policy and financial materiality is now a core board competency. Platforms such as Plan A (plana.earth) are built to translate this regulatory and fiscal complexity into the decision-ready data that leadership needs.

Today’s announcement from MP Materials may be the strongest signal yet that the answer is: No. In a landmark move, MP Materials and the U.S. Department of Defense have agreed to a 10-year price floor of $110/kg for NdPr—a critical magnet rare earth—and significant government co-investment to expand U.S. downstream processing capabilities. This is not just industrial policy; it’s strategic economic security. For years, China has played a dominant role in the refining and downstream processing of rare earths and other critical minerals. These are small, niche commodity markets—easily destabilized by oversupply and pricing volatility. The risk? Western producers cannot scale or sustain operations without confidence in long-term price stability. This partnership marks a turning point: It de-risks long-term capital investment in domestic processing It aligns public and private interests in securing resilient supply chains And it sets a precedent for how the U.S. and its allies can compete in markets where pure price competition is not enough Governments don’t need to pick winners—but they do need to set the rules that allow strategic sectors to win. This is a model to watch. And, I believe, one to replicate across other critical minerals and across the Atlantic. https://lnkd.in/gyD99WaA #CriticalMinerals #RareEarths #MPMaterials #SupplyChainSecurity #PriceFloors #PublicPrivatePartnership #IndustrialPolicy #Geopolitics #ResilientSupplyChains #NdPr #MagnetMetals #ElementalUSA

There was a time when traders focused mainly on the Federal Reserve. Now, many are watching the White House just as closely. In recent months, the Trump administration has started taking direct ownership stakes in several US-listed companies. The stated goal is to strengthen supply chains in industries considered strategically important, such as semiconductors, defense, and critical minerals. This approach represents a major shift in US economic policy. Previous administrations, especially Republican ones, avoided direct government participation in corporate ownership. The companies involved so far include Intel, MP Materials, Lithium Americas, and Trilogy Metals. Each time a new investment was announced, the company’s share price rose sharply as investors anticipated future government support and additional funding. For example, MP Materials’ shares increased by around 95 percent after the Pentagon acquired a 15 percent stake. As a result, traders and analysts are now trying to anticipate which firms might be next. Some are using artificial intelligence to analyse government documents and policy statements to identify potential targets. Supporters argue that these investments will help rebuild US industrial capacity and reduce dependence on China for key materials. Critics see it as a form of state capitalism that risks distorting markets, creating inefficiencies, and politicising corporate performance. For now, investors are treating government involvement as a bullish signal, but the long-term effects are uncertain. The key question is whether this experiment in government ownership strengthens national resilience or blurs the line between public policy and private enterprise.