Mario Monti seems naturally suited to be president of the prestigious Bocconi University in Milan, the institution where he first earned a degree in economics and management, and where he later became a rector. He is, to all appearances, a classic academic, with his soft-spoken, professorial manner.

But he also has a keen political eye and a steely toughness: from 1995 to 2005, Monti held two of the most influential positions in European policy-making, firstly as a highly regarded EU Single Market Commissioner, and then as an equally respected Competition Commissioner. And today, though he is far from the Brussels bubble, Monti is keen to deliver a stiff political message to European leaders about their unfinished business when it comes to his old portfolio, the Single Market. “The single market has never been as unpopular in Europe as it is now,” he says. “At the same time, it has never been so necessary. That is why it requires a huge political investment from the European institutions and from national leadership.”

As the European Union struggles to emerge from the economic downturn, it needs a new engine for growth, Monti says. And, he adds, it needs to complete single market to redress many of the imbalances across the European economy that have exacerbated the current Eurozone crisis. Although the original Single Market programme was initiated in the 1980s, it is still a work in progress. “I am disappointed,” he says. “This requires political focus, energy and financing. But also more direct involvement in solving local political problems.”

Last year Monti wrote a report that called on the EU to do more to protect its single market, underlining that the free movement of people, goods, services and capital are the cornerstone of EU prosperity. The report urged EU countries to make concessions on transport, energy, tax policy, social services, workers' rights and industrial policy to strengthen Europe’s internal market of 500 million people.

Since then, the European Commission has been consulting the other EU institutions on the basis of the report, but Monti says it needs a further high-level political push. “The Eurozone crisis has no doubt distracted from this. But people are clearer in their minds that if we want to have a higher sustainable growth rate these days, we need a more deeply integrated single market in Europe higher competitiveness and productivity. If you act on the single market, you get not only a more integrated Europe but a faster growing Europe.”

When it comes to transport, Monti says the failure to complete the single market also represent more than a symbolic setback. “Transport of goods and people are really the hard core of the single market,” he said. “And this is the paradox: 25 years on we are still talking about the pitfalls and the imperfections and bottlenecks.” He said there were several underlying reasons. “One is to do with the historical legacies,” he says. “Transport was intimately linked in many countries to state monopolies, and that makes it very difficult to change the mentality.”

The obstacles in transport affect all modes, and Monti’s report enumerates the most glaring areas. There is no single market for maritime transport, as customs formalities for ships travelling between two European ports remain subject to custom formalities identical to the ones foreseen for international maritime transport. In the rail sector, track gauges, energy supply and signaling systems differ from one Member State to another and cross-border circulation is much more difficult. The market for rail freight services is still not yet functioning due to incorrect or incomplete transposition of EU law by Member States.

Still, these can be overcome, Monti says. “There are no insurmountable obstacles in this and many other areas,” he says. “But there is the legacy of the past when we had national monopolies, and there were even security and defence issues, and probably insufficient political will. It makes the life of the single market so precarious.”

But beyond particular bottlenecks, there are two broader issues for transport, Monti warns. One is infrastructure: there is a lack of adequate physical interconnections across borders. The other is financing: transport is an area which has suffered because there is not enough sophisticated approach in the Maastricht Treaty and the Stability and Growth Pact, namely not to carve out room for serious public investment.

This is felt especially when it comes to the Trans-European Transport Network (TEN-T) of core roads, railway lines, shipping and aviation routes, and transport infrastructure. So far only a handful of the 30 priority projects have been completed, and Monti argues that governments are not “thinking European” on big infrastructure projects, such as roads, pipelines or water. “It will require a very profound political commitment, and an ability to lean against the winds of the obvious for the key leaders of the Council and the Commission to say, ‘let us also talk about this.” The crisis was due in part because of insufficient integration,” Monti says.

This brings Monti back to an irony about the single market. “It is very simple. But the process of delivering it to business and citizens is hugely complicated, and concerns thousands of directives, regulations, initiatives. It lacks a sense of unity,” he says. While there is a dedicated EU Commissioner for the Single Market, there are 12 or 13 Commission colleagues who are responsible for areas that make up the single market, like transport and energy and the digital economy, etc. He compares it to the euro, which is also complex but nonetheless attracts a concentrated political effort if there is a crisis, like now.

Monti argues that not having a well functioning single market is a more serious problem in a way: not only does it have an impact on the single currency area, but it holds down the overall productivity. “But to improve things you have to modify the situation in areas like customs regulations in maritime trade to legal protections of biotechnological inventions,” he says. “So it is a grey area of thousands of small bits and pieces, none of which is sexy or attracts a high level of political attention.” But, as he says, it certainly deserves Europe’s attention.

Indeed, Carsten Hess, Head of Deutsche Post DHL’s Corporate Representation in Brussels, says that while the European Union has long talked grandly about how to remake transport across the continent, its record has been decidedly spotty. “There has been an inability over the past 30 years to create efficient cross-border European freight networks,” he says. “You have two philosophies: one is about constant new regulation, and the other is about enforcing the single market which the EU has committed to. But we don’t have any complete single market at the moment, whether on road, rail or on air.”

While Hess says the European Commission sets an admirable aim in its White Paper in March when it calls for a Single European Transport Area, he is more skeptical about whether the measures outlined in the document are feasible or desirable. “We have a very complex system of regulation and policies in the 27 member states, and that impacts supply chains, and increases costs and the environmental impact,” he says. “This could be reduced by creating a true Single European Transport Area, which is what the White Paper is about. How do we get to a win-win situation where you reduce complexity and costs and therefore increase efficient transportation and logistics?”

Deutsche Post DHL has a certain weight of expertise as the world's largest logistics group. Headquartered in Bonn, it has some 450,000 employees across the world, and last year generated revenue of €51.48 billion. As its name suggests, it merges the former German mail authority Deutsche Post and express mail service DHL, yet it has expanded its operations to cover freight, global forwarding, supply chain management, warehousing, and even online sales platforms similar to eBay. All this underlines Deutsche Post DHL’s experience in a range of transport and logistic fields, which could prove invaluable for decision makers hoping to devise new policies.

Yet while Deutsche Post DHL is an enthusiastic supporter of EU integration, Hess sees the rhetoric regularly let down by the reality. Two and a half decades after the launch of the Single Market program, there is still no European market in cross border freight, national rules on cabotage that still require many truckers to return home with empty vehicles, and still no sign of the much-vaunted Single European Sky. “Why are the Commission and the European Parliament not more ambitious?” he asks. “I always hear that this is complicated, with diverging national interests. But if we can agree on binding climate targets, why can’t we have a true Single European Transport Area?”

Hess also refers to Deutsche Post DHL’s own environmental credentials as the first global logistics company to set itself a carbon efficiency target: its GoGreen program aims to improve carbon efficiency, including subcontractors’ business, by 30% by 2020, compared to 2007 levels.

“We’d love to increase our rail freight as we and our customers have our own efficiency targets,” Hess says. Yet the company’s efforts to move more to rail are often thwarted by the very politicians demanding modal shift. “MEPs say they want modal shift from road to rail, but when it comes down to discussing it, they say, ‘Not in my constituency, no more noisy trains here.’ But how do you deal with it if politicians do not want them in their back yards?” Here we need to have an EU wide discussion on acceptance of transport and its necessary infrastructure deployment.

Hess says there are all kinds of obstacles to cross-border rail freight, like a lack of common standards, a lack of choice of operators, poor infrastructure and no full competition. “Rail freight needs to increase its service quality to attract customers. If you want an integrated co-modal transport system, with rail playing its part, you need to make sure that the service is there,” he says.

And despite what the White Paper says about shifting freight of more than 300km onto trains by 2030, the reality is that there are many cases where that is not feasible, Hess says. “For example, when you need overnight or just-in-time delivery, rail will not be the preferred mode,” he says. Hess argues that customers rather than regulation should decide about the mode. “Instead of those scenarios we should place our bet on smart incentives to foster technology driven industry solutions. There the White Paper’s Technology Roadmap could help to increase research ending into quick market deployment which provides operators with affordable greener fleet solution. If  new trucks with e-engines cost three times as much as normal diesel engines, do you really think operators will pay for them?” he says.

Which is why he feels that the White Paper, for all its aims, can only be the start of a new discussion. “Do we want a Single European Transport Area that is efficient and cuts down emissions, complexity and costs?” he asks. The White Paper should look more at industry-based and technology-based solutions, rather than another round of regulations that increase costs while most of the adopted legislation on a Single European Transport Market has not been fully enforced yet. Let’s put more efforts into smart solutions that provide incentives.”

Roads, railways, canals, bridges, ports, airports: Europe is peppered and crisscrossed by infrastructure for all modes of transport. And yet despite the visible signs of buzzing transport all around, more and better transport links are still needed to deal with issues like deteriorating infrastructure and growing congestion. European leaders have long recognized that efficient transport for people and freight is essential for a thriving society and economy, and significant chunks of the infrastructure need to be repaired and renewed. Indeed, in the case of the Trans-European Networks (TENs), they still have to be built.

But these are huge jobs, often costing billions of euros. Who is ready to foot the bill for such projects, especially in these budget-crunching times?

It’s an issue that Europe is trying to grasp at the moment, not least because a 27-nation entity like the European Union can deliver huge economies of scale when it comes to major transport projects. It was at the top of the agenda at the informal Transport Council organized by the Polish EU Presidency in the Baltic resort of Sopot on September 5 and 6 when ministers discussed how best to apply public–private partnership (PPP) ventures to spread the financial, technical and operational risks in infrastructure projects. “The financial crisis we are faced with now has shown that public funding – both at EU level and member state level – is insufficient to finance infrastructure investments,” said Polish Infrastructure Minister Cezary Grabarczyk, who chaired the meeting. “We need to look at new sources of funding.”

OECD figures show that the GDP share of investment in inland infrastructure (road, rail, inland waterways) in Western Europe has declined steadily since the 1970s. It has fallen from an average 1.5% in 1975 to 1.2% in 1980 and further to 1.0% in 1982, after which it leveled off. The most recent data show that investment in inland transport infrastructure as a percentage of GDP declined again in the 1990s to around 0.8% in 2000, where it has remained. However, there are marked differences between countries, especially for recent years, varying from 0.5% in Denmark to 1.1% in Spain in 2009.

Grabarczyk said he wanted Sopot to kick off a debate on European rules for PPP - its definition, risk sharing and the consequences on debt and deficit - so that decision makers can have clear rules before they put out invitations to tender. One issue, for example, is whether Eurostat can revise its current rule that says the public share of PPP is included in debt and deficit statistics.

But although PPP has been pioneered in various member states for many years – notably France, Germany and the United Kingdom – there is resistance against setting up a harmonized system at European level. EU Transport Commissioner Siim Kallas has played down suggestions that the debate will lead to restrictive rules. “The challenge for now is to promote good practices and good governance, along the lines of investments made in partnership with the EIB. But there is no strong and centralized European legislation in the works,” he said.

PPPs already account for many major European infrastructure projects. In 2010, some 112 PPPs in the EU were completed, amounting to €18.3 billion in value. The United Kingdom was the leader with 44, followed by France (19), Germany (14), and Spain (13).

The Sopot meeting ended with a broad agreement that while PPP is a complementary model for financing infrastructure; public funding remains the basic source of finance. But since there is no uniform definition and methodology for PPP in the EU, nor is there a risk-sharing model, it assumes a range of forms, depending on the state in question. While there is no move to harmonize PPP practices, the Commission is set to issue proposals to reform the different financial regulations this autumn, to provide a framework for low-carbon investment.

It ties in with the agreement made last December at the International Road Transport Union (IRU) conference and ministerial in Brussels to develop efficient, safe, and sustainable road transport PPPs.

The Commission is nonetheless looking more closely at PPP options. Last June, when it proposed a new seven-year EU budget (Multi-annual Financial Framework) covering public expenditure between 2014 and 2020, it sought to concentrate public funding on the investment that would not occur without public intervention. As a result most of the €500 billion required for the TEN transport networks by 2020 is expected to be covered by the market and private investors. New financial instruments aiming at leveraging public investment, such as ‘project bonds’, are likely to be created in order to close the gap between the investments needed and the public resources available.

All this suggests that however grim the budgetary strains across Europe, there is still the will to find ways to ensure existing transport infrastructure is maintained and modernized, that new links are built, and that people and goods can still get to where they need to go. The methods for funding the upkeep and renewal may well be different, but for the moment, they are still very much part of Europe’s priorities.

The automotive industry has known for years that its continued existence depends on its ability to adapt to climate change and make vehicles that produce ever lower emissions. But Neelie Kroes says the survival of the industry is also linked to another factor: information technology-related research and European level co-operation.

Kroes, who is EU Digital Affairs Commissioner and Commission Vice President, told the annual gathering of the European Council for Automotive R&D in Brussels earlier this year that the automotive industry has to improve on the sustained excellence in research within the sector. “Only that can ensure the future successes of this industry”, she said.

Kroes called on the industry to convert their efforts into "a global market success" via enhanced co-operation and standardization of ICT-aided vehicles. "When I speak about ‘Every European Digital,’ what I want you to hear is ‘Every vehicle digital.’ In this way, your daily work is a key part of Europe's digital transformation."

The Council for Automotive R&D has helped the EU lead initiatives to promote road safety and traffic management by pooling information provided by vehicles that are hooked up to the digital network infrastructure, but Kroes urged the manufacturers to collaborate to develop such schemes. "The European automotive industry can stay in the lead if we collaborate. Mess it up and we will be left behind,” she said. “Let's keep and extend collaboration at the European level. Pre-commercial collaboration in research can be key for staying competitive. Reducing risks and costs can give you a better shot at global leadership in the future. We need each other to deliver mobility that is connected, smart, safe and clean.”

The European Automobile Manufacturers are the largest private investors in R&D in Europe with over €26 billion investment per annum, or 5% of turnover, a figure that rises to 30% as a proportion of overall EU industrial R&D.

So, what are the most pressing R&D challenges? Kroes mentioned three:

• Converging the internet and connected vehicles. Wireless communication to and from vehicles is critical to improve both safety and efficiency, but global cooperation and standardization is needed to convert this into global market success. This is where the EU's Future Internet Public Private Partnership comes in, which can seize the opportunities of the next generation of wireless broadband, beyond 3G, to meet the growing demand for vehicle connectivity.
• Electric vehicles. This is where ICT and green vehicles truly meet, Kroes said, co-operative research is needed to help develop global standards. An obvious area is in the complex electronics needed to manage modern, high-power batteries and electric motors.
• Future manufacturing systems. Kroes said that the automotive industry were the last large manufacturing industry left in Europe, and she urged more coordination between the Commission’s industrial policy initiative and the Factories of the Future.