What the study found
European governments are using off-balance-sheet financial instruments to support green growth and sustainability without formally increasing public debt. The article argues that these policies expand fiscal capacity beyond taxation and spending by managing liabilities within strict fiscal rules.
Why the authors say this matters
The authors conclude that contemporary industrial policy is not only about directing public investment, but also about managing liabilities under fiscal constraints. The study suggests that successful design of these policies depends on "techno-political coalitions," meaning alliances that combine technical expertise and political influence to work through fiscal and statistical rules.
What the researchers tested
The article examines how fiscal constraints shape contemporary industrial policy, with attention to European green industrial policy. It uses a case study of energy performance contracts, which are creative instruments used to finance building renovations off the public balance sheet.
What worked and what didn't
The article presents energy performance contracts as an example of an off-balance-sheet instrument that can facilitate renovation financing. It also argues that designing such policies successfully requires intricate technical considerations and political coordination.
What to keep in mind
The abstract does not describe empirical limits, data sources, or specific comparative tests beyond the case study. The claims are framed as the author's argument in the article, and no broader limitations are stated in the available summary.
Key points
- European green industrial policy is being supported with off-balance-sheet financial instruments.
- These instruments are presented as a way to avoid formally increasing public debt under strict EU fiscal rules.
- The article argues that fiscal capacity now includes managing liabilities, not only taxation and spending.
- The authors say successful policy design depends on techno-political coalitions that combine expertise and political influence.
- Energy performance contracts are the case study used to illustrate off-balance-sheet financing for building renovations.
Disclosure
- Research title:
- Off-balance-sheet finance reshapes green industrial policy in Europe
- Authors:
- Vanessa Endrejat
- Institutions:
- European University Institute
- Publication date:
- 2026-02-11
- OpenAlex record:
- View
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