Making environments safer: a safe asset for a green (and financial) new deal and for more responsible central banks - what could, and should, the ECB do?

In the first part of the chapter we elaborate on the basic structure of financial markets and the stabilising role of central banks on the one hand, and on the strategic role of fiscal policy and public spending in long-term infrastructure investment on the other. In particular, we argue that there is a social role for central banks in creating the conditions for a socialisation of both infrastructure investments and their financing. In the second part we focus on the European case, where the response to the pandemic crisis has taken the form of a Recovery Plan, which foresees an important role for a European Green Deal. Since the issue of financing the Green Deal implies a reassessment of public debt management in the eurozone, we introduce the design of a European Debt Agency, tasked not only with the efficient management of previously and newly issued national public debts, but also with facilitating the issuance of a future common debt for EU-wide infrastructure investments. We show the crucial role that the ECB could and should play in this new institutional framework.