preview

The European Union

Decent Essays

Following United Kingdom membership to the European Union in 1973 alongside other European states, further economic integration of the states lead to the Maastricht agreement of 1992 . The central feature of the agreement was the incorporation of the European monetary union (EMU) the EMU was based on four financial principles of inflation, long-term interest rates, fiscal debt and deficit and exchange rate. The aim of the Union was to harmonise trade and economic relations across member states and as such the EMU imposed restriction on infrastructure investment through strict borrowing limits. As a member state Britain had to comply with the four criteria despite the pressure it placed on its public borrowing and financing of infrastructure. To meet its social responsibility the United Kingdom government started the private finance initiative.
1992 - Private finance initiative is the resultant means of financing infrastructure following the Maastricht agreement to reduce public sector borrowing requirement. It was first introduced in the 1992 Autumn Statement by Conservative Chancellor Norman Lamont. PFI was a means through which the private sector finances major infrastructure projects by lending to the public sector. Operational risk for the infrastructure is passed over to the private sector.1994 - Private Finance panel.
1997 - The Treasury Taskforce,
Sir Malcolm Bates was appointed to review the PFI and he made twenty seven recommendations to streamline and improve

Get Access