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CONFERENCE ORGANIZED IN ASSOCIATION WITH THE ITALIAN EU PRESIDENCY

INVESTING IN LONG-TERM EUROPE: RE-LAUNCHING FIXED, NETWORK AND

SOCIAL INFRASTRUCTURE

A CONFERENCE JOINTLY ORGANIZED BY THE ITALIAN BANKING INSURANCE AND FINANCE FEDERATION, THE OECD, THE LONG-TERM INVESTORS CLUB AND CASSA DEPOSITI E PRESTITI GROUP

WITHTHE EUROPEAN LONG-TERM INVESTORS ASSOCIATION, THE OFFICIAL MONETARY AND FINANCIAL INSTITUTIONS FORUM, INTEGRATE, THE ITALIAN COUNCIL OF THE

EUROPEAN MOVEMENT

ROME, 12-13 DECEMBER 2014Scuderie di Palazzo Altieri

Via di Santo Stefano del Cacco, 1

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WHY THIS CONFERENCE MATTERS

Re-launching investment is the key driver for striking a better balance between sustainable growth and fiscal/balance-sheet consolidation in post-crisis Europe.Long-Term sustainable Investment in the real economy (LTSI) in fact is essential for bridging both visible and emerging gaps in European infrastructure (from Trans-European Networks to the digital divide). LTSI is also required for enhancing competitiveness and innovation, particularly in the SME sector. Finally LTSI is the only way to face up to those long-term challenges confronting our societies: ageing populations, stressed health and social care provision, climate change, environmental degradation, social cohesion and quality of life that has remained static for most people in our communities for too many years.Risk in long-term investing comes from many sources and safe investment involves a range of players. Managing such risk requires new parameters that will shape the behaviour of - and options available to - institutional investors, regulators, interme-diaries and capital beneficiaries.Post-crisis, we are at a tipping point with new challenges and opportunities. President Juncker announced that a first priority for the new Commission is to present an ambitious Jobs, Growth and Investment Package to mobilize up to 300 billion euro in additional investment in the real economy over the next three years. Such a Program will only succeed if policymakers work seriously on creating the right conditions for bankable pipelines of projects to be carried out in different sizes and sectors.

WHAT THIS CONFERENCE WILL

DELIVERIn this general context, the Rome Conference - organized in association with the EU Italian Presidency – aims to take stock of what has happened in the last few months, notably in connection with the Italian Semester. We will discuss the issues contained in the “Action Plan for Long-Term Financing of European Economy” in order to inform the EU policy agenda on long-term investment and implementation of the Action Plan during the next legislature A special focus will be given to social investments, aimed at delivering long lasting social outcomes in communities and individual skills and opportunities, and to the PPP (Private Public Partnership) in investments. If Europe wants to enable long-term institutional investors to invest in this type of projects, they need to be standardized and collected in dedicated portfolios. This poses some challenges, which should be at the center of EU and member states’ policy actions in terms of long-term investment, especially in Continental Europe.

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CONFERENCE PROGRAMMEDAY 1

Time Title Speaker/Discussant8.00 – 08.30 REGISTRATION AND COFFEE8.30 – 08.50 Welcome remarks Luigi Abete, Chairman of Italian

Banking, Insurance and Finance FederationRintano Tamaki, Deputy Secretary General OECD

08.50 – 09.15 Keynote address Jonathan Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union

9.15 – 11.15 Session 1: Investing in long-term Europe. Where do we stand? Progress made and next steps (Chair Philippe Legrain, LSE and former economic adviser to the President of the European Commission)

Philippe Herzog, Investing in Long Term Europe, President Confrontations Europe

Franco Bassanini, How to create a more favorable financial and non- financial regulatory framework for long term investment in the EU, Chairman of Long-Term Investors Club and President of Cassa depositi e prestiti (CDP)Roberto Gualtieri, The EU policies for long term investment: Where do we stand? Progress made and next step, President Econ Committee, European ParliamentMario Monti*, How to re-launch investment in the EU?, President of University Bocconi

* To be confirmed3

Related actions

The need for long-term investment was advocated in reports by: Jacques de Larosière (2009) and Mario Monti (2010), as well as in various 2010 European Commission Communications (such as those on A Single Market Act, A Comprehensive European International Investment Policy, and The EU Budget Review).Since 2009, the OECD has been involved in collecting data and producing studies in particular on the role of institutional investors (Pension funds, Life insurance companies and SWFs) in financing long-term investmentStrategic dialogue was initiated in 2011 by INTEGRATE with long-term investment institutions, financial and policy intermediaries and potential beneficiaries to stimulate longer-term investment in strategically important innovative social infrastructures and the formal funding structures needed to facilitate this. Specifically, the creation of an ELTIF (fund of funds with financial and knowledge capital) for innovative social infrastructure across EU regions.

2013+

March 2013 - the European Commission adopted a Green Paper on the long-term financing of the European Economy.July 2013 - 17 European long-term financing institutions decided to launch the European Long-Term Investment association (ELTI) a.i.s.b.l. - formally established in November. The ELTI gathers 23 European long-term financial institutions. With a combined balance sheet of € 2.45 trillion, ELTI’s goal is to promote long-term investment in close alignment with EU objectives and initiatives to foster sustainable, smart and inclusive growth and job creation.December 2013 - a High Level Expert Group set up by the Economic and Financial Committee released a Report, which built on the issues raised by the Green Paper, containing recommendations on financing infrastructure and SMEs.February 2014 - on its own initiative, the European Parliament reported on the long-term financing of the European economy, emphasizing the importance of long-term investment as a key lever to stimulate growth.March 2014 - the European Commission issued its Communication on Long-Term Financing of the European Economy (the co-called “Action Plan”).

2009+

In 2009 Caisse des Dépots, Cassa Depositi e Prestiti, the European Investment Bank and KfW have created the Long Term Investors’ Club (LTIC) with the aim of bringing together major worldwide institutions to emphasis common identity as long-term investors, to encourage cooperation and to foster the right conditions for long-term investments in promoting growth. Today the Long Term Investors’ Club is composed of 15 major financial institutions and institutional investors from all over the world mainly from G20 countries, representing a combined balance sheet total of USD 3.2 trillion.

Related actionsThe focus on long term investments is widely shared by the financial industry across both Europe and Italy. In 2013 the Italian Banking Insurance and Finance Federation (FeBAF), which gathers the main national financial associations in Italy, responded to the Green Paper’s aim of ensuring sustainable and adequate long-term financing of undertakings (companies and projects) in the European Union. Since the onset of the economic crisis, intermediaries’ long-term financial support to European companies has inevitably suffered from the increasing regulatory and capital burdens (Basel standards and Solvency). The proposed ELTIF – stated the FeBAF - has the potential to facilitate long-term accumulation, to satisfy the needs of ultimate recipients, notably SMEs and infrastructure projects. Awareness on the critical importance of the topic has grown also at the international level. Long-term investment was first endorsed in September 2013 by the G20 under the Russian Presidency. The Australian Presidency of the G20 has taken over the issue with a particular focus on infrastructure financing.In 2013, OECD also established a taskforce that has developed the High-level Principles of Long-term Investment Financing by Institutional Investors endorsed by the G20.

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and Former President of the Council of MinisterMario Moretti, The financing of investments in large corporations, CEO Finmeccanica

Thierry Déau, The financing of infrastructure in Europe, CEO of Meridiam

Philippe Legrain, Boosting demand and enhancing supply: the crucial role of infrastructure investment, LSE and former economic adviser to the President of the European CommissionConclusions Mattheus Szczurek, Polish Minister of

Finance

(10.45) Round table (Chair Philippe Legrain)Giovanni Sabatini, Director General Italian Banking Association, Pier Virgilio Dastoli, President of Italian Council of the European Movement, Dominique de Crayencour, Secretary General of the European Long Term Investors Association, Shahin Vallee, Economic Advisor to the French Minister of the Economy

Session 1 briefing note – The infrastructure project financing market still represents only 10% of all infrastructure financed in Europe. The remaining 90% is financed either by corporate financing or by general taxes. So the project financing market is still rather small and the potential for growth is indeed extremely high, especially in the developed economies were the fiscal burden leaves very little space of maneuver for direct public investment. In the EU this has contributed to an “Infrastructure Bottleneck” that we need to overcome. Opportunity is provided by the European Commission’s Communication on Long-Term Financing of the European Economy (the co-called “Action Plan”) and the focus of the G20 on long-term investment with a particular focus on infrastructure financing. Successful implementation will need new thinking and new approaches. As Joseph Stiglitz (Nobel Laureate in Economics) said recently when complimenting the approach of the Italian Government - Long-run considerations, not short-run financial exigencies, should determine which activities occur in the private sector. The decision should be based on where activities are carried out most efficiently, serving the interests of most citizens the best.

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DAY 1Time Title Speaker/Discussant11.15 – 11.45 COFFEE BREAK11.45 – 13.30 Session 2: The response of institutions, industry and civil society

(Chair Philip Middleton, Deputy Chairman, Advisory Board, OMFIF; Senior Advisor, Head of Central Banking, EY)

The role of the EIB in financing infrastructure in Europe

Dario Scannapieco, Vice President EIB and President EIF

The new OECD data on Asset Allocation by LT Institutional Investors

Raffaele della Croce, Senior Economist OECD

The role of insurance companies in financing LTIs

Bernard Spitz, Board Member Medef and Chairman FFSA

The role of pension funds in financing Long Term Investment

Gabriel Bernardino, Chairman of the European Insurance and Occupational Pensions Authority (EIOPA)

Infrastructure investment as a global asset class

Sara Bonesteel, Managing Director, Head of Portfolio Strategy, Prudential Financial

Corporate governance and the role of short term investors in Long Term Investment

Edoardo Reviglio, Chief Economist CDP

The role of European Promotional Banks in Long Term Investment

Natasha Valla CEPII Deputy Director

Conclusions Fabrizio Pagani, Head of Technical Secretariat, Italian Ministry of Economy and Finance

(13.15) Round table (Chair Philip Middleton)

Fernando Navarrete, DG ICO, Nicolas Firzli, Director of Economic Research of World Pensions Council, Dario Focarelli, Director General Italian National Association of Insurance Companies, Giovanna Melandri, President of Uman Foundation, Paola Subacchi, Research Director, International Economics, Chatham House, Richard Woolhouse, Chief Economist British Bankers Association

13.45 -15.00 LUNCH

Session 2 briefing note The focus on long-term investments is widely shared by the financial industry across both Europe and in Italy. In 2013 the Italian Banking Insurance and Finance Federation (FeBAF), which gathers the main national financial associations in Italy, responded to the EC’s Green Paper Green Paper on the long-term financing of the European Economy. In particular, ensuring sustainable and adequate long-term financing of undertakings (companies and projects) in the European Union. Since the onset of the economic crisis, intermediaries’ long-term financial support to European companies has inevitably suffered from the increasing regulatory and capital burdens (Basel standards and Solvency). As FeBAF stated, the proposed ELTIF has the potential to facilitate long-term accumulation and to satisfy the needs of ultimate recipients, notably SMEs and infrastructure projects. Time is short. Europe needs serious investment policies and long-term finance needs to find the right place to invest its money. We have all heard talk of financing infrastructure with PPP for over 20 years. Too little has been achieved so far, except for the UK and other few country-specific experiences.

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DAY 1Time Title Speaker/Discussant15.00 – 16.15 Session 3: Re-tuning the European Public-Private Partnership Agenda

(Fabrizio Saccomanni, LSE and Former Italian Minister of Economy and Finance)

Financing infrastructure in Europe Giovanni Gorno Tempini, CEO of CDP Group

Financing transport infrastructure in Europe Carlo Secchi, Bocconi University and EU Commission TEN-T CF

Financing energy infrastructure in Europe Matteo Del Fante, CEO of Terna

New EU financing framework for re-launching investment

Thomas Wieser*, Head of EFC and Eurogroup

(15.45) Round table. Financing Trans-European networks. The state of the artFabrizio Saccomanni, LSE and Former Italian Minister of Economy and Finance (Chair), Nicolás Merigo, CEO of Marguerite Fund, Nicky Edwards, Director, Policy and Public Affairs, The CITYUK, Fabio Galli, Director General Assogestioni

16.15 – 17.30 Conclusions

Maros Sefcovic*, Vice President of the Commission and Commissioner Energy Union

Gunther Oettinger*, Commissioner for Digital Economy and Society

Pierre Moscovici, Commissioner, Economic and Financial Affairs, Taxation and Customs

Michel Sapin, French Minister of Finance

Pier Carlo Padoan, Italian Minister of Economy and Finance and ECOFIN President

Session 3 briefing note If we consider the share of investment financed by PPP versus those purely financed by taxpayer money they are equal to 10% in transport in the UK and 5% in Continental Europe, 20% in education in the UK and less than 1% in Continental Europe, 40% in the UK in health and 1% in Continental Europe. So the situation for smaller and medium PPP in social and utility infrastructure is still seriously underdeveloped, except for the UK, the Netherlands, Belgium and, to lesser extent, France.Even if we manage to create the right conditions on the supply-side of long-term finance for infrastructure, we will never get a market for PPP in Europe if we do not work on creating the right conditions on the demand side. By that we mean the creation of a much larger base of pipelines of “investment grade” and bankable projects, for large, medium and small public works and infrastructure. At the moment this is probably the single most serious problem for financing infrastructure in Europe: lack of investable projects. The EU encourages member States to finance investment using this type of structure, but the process is slow in taking off. Why are there still so few standardized PPP operations, combined in single portfolios, conducted in many states of the Union? There are many reasons and some of them depend on country specific conditions. A fairly common problem is the absence of technical capabilities of public administrations compared to contractual schemes, especially if they are not standardized and are very complex. Ad hoc agencies, which many governments constituted to provide technical assistance to administrations, turned out to be generally inefficient. Many countries, such as Italy, is restructuring and re-launching such agencies, also with the aim of centralizing and standardizing schemes according to different types of sectors. Considerable human resources (teams of experts) and major cultural changes must then be introduced to start the process.

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CONFERENCE PROGRAMMEDAY 2

Time Title Speaker/Discussant8.30 - 9.15 REGISTRATION AND COFFEE9.15 - 09.30 Session 4: The unexplored business of social infrastructure*

Welcome by INTEGRATE Fausto Felli, Chair of the Executive Board, Integrate

9.30 – 10.30 Debating ELTIFs: the demand side (Chair Jonathan Watson)

Long-term Planning and valuing public benefit

John F Williams, Chairman and CEO Impact Infrastructure LLC, New York and Adjunct Professor, Columbia University

Investing in responsive and sustainable health infrastructure

Miklós Szócska, former Hungarian Minister of State for Health

Imagining the future for social services Mary Duffy, Chair of Imagining the Future (a scenario planning initiative commissioned by The Chief Social Work Advisor to Scottish Government) and National Head at BBC Children in Need

The role of Unions for long-term infrastructure investment

Bruno Costantini, ETUC

A regional reflection and conclusions Sir Albert Bore, Leader of Birmingham City, ex-President of Committee of the Regions, Member of CoR Budget Committee

10.30 – 11.15 Debating ELTIFs: the supply side (Chair Steve Wright)

Innovative investment - Closing the viability gap between risks, costs and revenues

Georg Inderst, CEO Inderst Advisory

New channels for capital formation: non-bank financing and radically re-thought PPPs (supply side)

Agathi Pafili, Senior Regulatory Policy Advisor, EFAMA

What can drive Pensions Funds to invest in social infrastructure

Matti Leppällä, General Secretary PensionsEurope

Effective capital partnerships: not just about money

David Wood, Director of the Initiative for Responsible Investment, Harvard University

11.15 – 11.45 COFFEE BREAK

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Time Title Speaker/Discussant11.45 – 12.30 Debating ELTIFs: the Institutional side (Chair Michael Hornsby, EY)

Models of cooperation between institutional investors, promotional banks and ESIF

Giorgio Chiarion–Casoni,Head of Infrastructure Unit DG ECFIN

Early engagement by Charities, Philanthropists and Venture Capital in promoting human and social capital in local economies

Luciano Balbo, European Venture Philanthropy Association

Investment and employment Jim Clifford, Director of Impact and Advisory Services at BWB; G8 Social Impact Investment Taskforce; GECES

Investment and Pension Funds Francesco Briganti, General Director AEIP

12.30 – 13.15 How to re-launch social infrastructure: next steps (Chair Paolo Garonna, Secretary General of Italian Banking, Insurance and Finance Federation)

Presentation of a proposal of Agenda for establishing an ELTIF for innovative social infrastructure

Fausto Felli, Chairman of Executive Board, Integrate

The role of civil society for European infrastructure investment

Pier Virgilio Dastoli, President of Italian Council of the European Movement

Testing the mechanics of a new ELTIF model for innovative social infrastructure: a social housing pilot study in Scotland

Ian Marr, Chief Executive Aberdeen YMCA and representative of Scottish institutional, political and social interests

Conclusions Paolo Garonna, Secretary General of Italian Banking, Insurance and Finance Federation

Session 4 briefing note Globally, there is renewed interest in and understanding of the value of social infrastructure in our economies. But in North America, the Far East, Australia and New Zealand these investments are also seen as more than catalysts for new business opportunities that enhance economies and internal markets. Social infrastructure brings other benefits that are essential for economic performance and human development: attractiveness of place, employment, improvements in social and human capital, a better quality of life and critically, services for currently unmet social needs (source: INTEGRATE).Generating pipelines of investable social, fixed and network projects will not be achieved in isolation. Complementary solutions are needed that drop traditional ways of working and thinking in order to achieve acceptable financial and social returns on investment: finding and unlocking the unexplored business potential of social infrastructure.The key for developing investable social infrastructure is the ability to know when private investment is the path to go down, and right now we don’t have the best ways to sort that out with the public interest in mind. That said, EU regions such as Norbotten (Sweden) and Kymenlaakso (Finland) have demonstrated that transparency in decision-making combined with long-term planning and associated risk assessment provide essential pre-conditions for longer-term investment in social infrastructure projects and associated services. A critical issue is to assess and address the relative capacity of places and sectors (public and social) to negotiate socially useful PPPs that achieve their social goals effectively and that deliver a sustainable return on investment.

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CONFERENCE ORGANISATION

1st level promoters: Italian Banking Insurance and Finance Federation, Long-term Investors Club, European Long-Term Investors Association, OECD, Cassa Depositi e Prestiti Group

Conference location: Scuderie di Palazzo Altieri

Via di Santo Stefano del Cacco, 1 – 00186 Romahttp://www.scuderiedipalazzoaltieri.it/index.html

How to get thereMetro Line A, fermata/stop Repubblica Metro Line B, fermata/stop ColosseoBus 60, 64, 70, 170, 40

Please submit your request of participation – until 3 rd December - at the link below:LTIrome/registration-formLTIroma/scheda-di-registrazione

For more information about the conference, hotels and local information please contact: LTIrome@thetriumph.com

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