Public Finance Management

Excited to share my latest piece for the International Institute for Strategic Studies on American state capitalism and critical-mineral diplomacy. Since January 2025, the Trump administration has moved decisively toward a more forceful, state-led approach to securing critical mineral supply chains—accelerating permits, brokering private capital, and deploying public financial institutions as strategic tools. China’s April 2025 export controls and licensing restrictions only reinforced this shift, helping trigger a surge of U.S. public investment into rare earths and other critical inputs. In the article, I argue the U.S. strategy now runs on three tracks—launched in stages but increasingly intertwined: 🏈 “America First” deals that deepen state involvement in domestic projects; 🤝 Bilateral agreements abroad, backed by government finance and public–private partnerships; 🌍 Pax Silica, a coalition-of-capabilities framework linking capital, reserves, processing know-how, and downstream demand across allied jurisdictions. Together, these tracks aim to secure “reliable supply chains and access to critical minerals,” now framed as a national-security priority. The real test is execution—and whether coalition-building can hold when it is paired with tariff threats and other leverage tools that strain transatlantic and wider allied trust. #EconomicSecurity #CriticalMinerals #RareEarths #Geoeconomics #IndustrialPolicy #SupplyChains #StateCapitalism https://lnkd.in/dJfPeKDh

Relatively small amounts of critical minerals underpin trillions of dollars in economic value globally. New IEA analysis highlights growing risks, including export controls, although countries are also taking steps to make supply chains more secure 👉 https://iea.li/4aTpQ33 The geographic concentration of critical mineral supply chains continues to grow, particularly for refining. Rare earths are the exception. The top supplier's share fell from 90% in 2023 to 85% in 2025, showing progress is possible with strong policies. Read more in the International Energy Agency (IEA)’s Global Critical Minerals Outlook 2026 👉 https://iea.li/4bNpwDh While critical mineral projects are being announced & developed across the globe, we see a structural imbalance in diversification efforts. Investment outside the dominant supplier remains concentrated in mining, while efforts to expand refining & downstream capacity lag behind. In a complex geopolitical environment, critical minerals have moved to the forefront of countries’ energy, economic & national security agendas. This is making a difference: public finance commitments more than quadrupled between 2023 and 2025, reaching $65 billion. New IEA analysis also sees a major opportunity to diversify supplies of strategic minor minerals. The investment needed is much smaller than the potential risks of disruption and can be seen as economic insurance. Since #CriticalMinerals account for a small share of final product prices, the cost of diversification could have a limited impact on consumers. For example, critical minerals account for around a quarter of battery cell costs but only about 3% of the price of an average EV. Diversified supply is not only a matter of investment: it also means tackling gaps in technology, equipment & workforce skills. Our new Global Critical Minerals Outlook 2026 includes guidance for policymakers on this & more. Read it in full on our site 👉 https://iea.li/4bNpwDh

𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐦𝐞𝐚𝐬𝐮𝐫𝐞 𝐭𝐡𝐞 𝐢𝐦𝐩𝐚𝐜𝐭 𝐨𝐟 𝐭𝐚𝐱 𝐩𝐨𝐥𝐢𝐜𝐲 𝐨𝐧 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭? Sounds like a simple question. But while reading and synthesizing 300+ empirical studies over the course of several years, Rebecca Lester from Stanford University Graduate School of Business and I realized that there are many answers to this question. "Investment" can mean new machines, R&D spending, an acquisition, a new factory, or new hires. Pick a different measure, pick a different dataset, and you can get a different answer to the very same policy question. That gap, between the question politicians ask and what different teams of researchers actually measure, explains a lot of the confusion and disagreement in tax policy debates. Becky and I reviewed and discuss this entire literature for the Journal of Accounting and Economics. We discussed a lot with colleagues, including giants in the field like Michael Devereux and Christoph Spengel on London Business School campus two summers ago ( 👇 ). The resulting paper is open access (link below). But we did not want to step there. Today we are releasing its companion resource, free for everyone: 🔍 measuringtaxeffects.com 📊 84+ ways researchers measure how firms respond to taxes, sorted by outcome: investment, R&D, M&A, employment, and where profits get booked. Each one with its strengths, its weaknesses, and the data behind it. 📁 51 datasets documented: what is in them, who can access them, what they cover, where they fall short. 📖 A glossary of 40+ terms for anyone entering the field. ➡️ 𝘽𝙚𝙩𝙩𝙚𝙧 𝙢𝙚𝙖𝙨𝙪𝙧𝙚𝙢𝙚𝙣𝙩 𝙢𝙚𝙖𝙣𝙨 𝙗𝙚𝙩𝙩𝙚𝙧 𝙚𝙫𝙞𝙙𝙚𝙣𝙘𝙚. 𝘽𝙚𝙩𝙩𝙚𝙧 𝙚𝙫𝙞𝙙𝙚𝙣𝙘𝙚 𝙢𝙖𝙠𝙚𝙨 𝙛𝙤𝙧 𝙗𝙚𝙩𝙩𝙚𝙧 𝙩𝙖𝙭 𝙥𝙤𝙡𝙞𝙘𝙮. For PhD students: start here instead of reverse-engineering measures from 40 different papers. Everyone else: this is what the plumbing under empirical tax research actually looks like. Both the paper and the site are meant to be a useful resource, but certainly not perfect or complete. Tell us what is missing. #Taxation #TaxPolicy #Research #taxesmatter

Europe stands at a pivotal moment: the long-overdue reconstruction of its #defense industrial base is no longer optional—it’s imperative. Years of underinvestment, fragmentation, and reliance on external suppliers have eroded our capacity to equip and sustain our armed forces. The political momentum for rearmament is real—but if #Europe wants true strategic autonomy, it must act with purpose, not just scale. 🏛️ 1. Secure Sustainable Defense Funding Defense spending across the EU has lagged for decades. At 2.2% of GDP, Europe simply isn’t investing enough to match the scale—or complexity—of modern defense needs. Temporary solutions like tapping into the ESM or NGEU can help, but long-term stability requires a well-capitalized European Defense Fund. Strategic autonomy begins with financial sovereignty. 🛡️ 2. Buy European First, Align Industrial Policy Europe can no longer afford inefficiencies: 17 different tanks, 20+ fighter jet models, and procurement still driven by national rather than collective interest. We need a “Buy European” doctrine that mirrors the strategic coherence of South Korea or the US F-35 program. Cross-border procurement and industrial integration—particularly with UK firms now looped into joint EU programs—must become the rule, not the exception. 🏭 3. Scale Up and Rebuild the Supply Chain Europe’s defense ecosystem—2,500 firms versus 60,000 in the US—is ill-prepared for sustained ramp-up. Achieving meaningful scale will take 3–5 years and requires industry-government co-planning. Strategic partnerships, regional stockpiling, SME inclusion, and cutting red tape are critical. Sovereignty must not mean domestic hoarding or champion favoritism. 🚀 4. Build a Dual-Use Tech Powerhouse With just €9.5bn in defense R&D (vs $140bn in the US), Europe must radically rethink its innovation model. Dual-use innovation hubs, co-funded AI and quantum programs, and cross-border IP-sharing can help close the gap. Our goal: not to copy the US, Israel, or South Korea—but to become a competitive peer. 🧭 5. Forge Unified Governance Europe’s greatest weakness is fragmentation: divergent export rules, overlapping procurement standards, and a lack of binding mechanisms dilute impact. We need a “unifying command”—stronger institutions, faster decision-making, and regulatory convergence across member states. A stronger Europe starts with shared rules and a common purpose. 📈 The time to rearm Europe is now—but not with yesterday’s playbook. This is not just about spending more; it’s about spending wisely, building industrial resilience, and thinking long-term. The global defense landscape is shifting—and Europe must move from reactive to strategic. #StrategicAutonomy #Innovation #SupplyChains #Security #EUeconomy #Macroeconomics #R&D #Geopolitics #DualUseTech #Ludonomics #AllianzTrade #Allianz

📣 Europe cannot afford to be naive about its digital dependencies. France’s decision to prioritise European technology in the public sector is a long-overdue wake-up call. When it comes to critical infrastructure and sensitive data, choosing European solutions is a responsibility. What France is doing should now be replicated across all Member States as quickly as possible. 🇫🇷 The 🇪🇺 Commission awarding a tender for sovereign cloud services last week to four European providers shows the kind of direction that we need to take. This is a step in the right direction. Europe needs real, scalable and secure alternatives, not more strategies that remain on paper. ☝️ One core issue now is a public procurement strategy for the entire EU. ‼️ We need to start putting European alternatives first in our most critical and sensitive areas. As long as the lowest price outweighs security and sovereignty, we are undermining our own resilience. Public procurement must reflect Europe’s strategic interests. 📈 This is also a great way to scale European companies. It is about growth and competitiveness too. Today, too much public money flows outside Europe, mainly to the US. By choosing European solutions, we invest in our own companies and bring back our tax payers money to the continent. 👉 That is also why I expect concrete and ambitious action from the upcoming Tech Sovereignty Package including the Cloud and AI Development Act. It must set clear priorities: security, sovereignty, and Europe’s competitiveness. We must be bold by finally putting Europe first and create the conditions to build and scale European alternatives. ❗️ There is a real momentum now to make European technological sovereignty a reality. The direction is shifting both in Member States and at the EU level. Next thing: action. #sovereingty #europe #tech #cloud

Europe stands at a crossroads, facing pressure from geopolitical flashpoints and increasing protectionism, coupled with structural growth weaknesses. As we look ahead to 2025, Europe's top priority must be to strengthen its sovereignty in a shifting world order.   In my latest contribution to the World Economic Forum, I outlined four critical areas where Europe must take decisive action to maintain its place in the geo-economic showdown.    1️⃣ Europe must actively and pragmatically pursue free trade agreements. The recent breakthrough in the Mercosur deal presents a significant growth stimulus for the European economy and sends a strong message in favor of free, rules-based trade. What matters now is rapid implementation. 2️⃣ Europe needs to launch a strategic investment offensive for targeted funding of key technologies such as AI and quantum computing. Infrastructure investments for digital and green transformations are equally vital. 3️⃣ To effectively mobilize private capital, Europe must prioritize advancing the Capital Markets Union, enabling companies to access a wider array of European capital sources and enhancing economic sovereignty in an increasingly fragmented global economy. 4️⃣ Finally, we must simplify the regulatory landscape to facilitate faster project execution. This could involve implementing a “one in, two out” rule for new legislation and limiting the reappointment of retiring civil servants to one-third within the EU.   The path forward is clear: Europe's future geopolitical relevance hinges on a strong economy, necessitating massive investments and deregulation. It's time for Europe to step out of its comfort zone and prioritize its own interests to forge a stronger, more independent continent.   You can read the full article here: https://lnkd.in/eRC7VK6K   #WEF25 #Europe #RolandBerger

Today’s announcement from MP Materials may be the strongest signal yet that the answer is: No. In a landmark move, MP Materials and the U.S. Department of Defense have agreed to a 10-year price floor of $110/kg for NdPr—a critical magnet rare earth—and significant government co-investment to expand U.S. downstream processing capabilities. This is not just industrial policy; it’s strategic economic security. For years, China has played a dominant role in the refining and downstream processing of rare earths and other critical minerals. These are small, niche commodity markets—easily destabilized by oversupply and pricing volatility. The risk? Western producers cannot scale or sustain operations without confidence in long-term price stability. This partnership marks a turning point: It de-risks long-term capital investment in domestic processing It aligns public and private interests in securing resilient supply chains And it sets a precedent for how the U.S. and its allies can compete in markets where pure price competition is not enough Governments don’t need to pick winners—but they do need to set the rules that allow strategic sectors to win. This is a model to watch. And, I believe, one to replicate across other critical minerals and across the Atlantic. https://lnkd.in/gyD99WaA #CriticalMinerals #RareEarths #MPMaterials #SupplyChainSecurity #PriceFloors #PublicPrivatePartnership #IndustrialPolicy #Geopolitics #ResilientSupplyChains #NdPr #MagnetMetals #ElementalUSA

I can’t say that Trafigura calling for the nationalization of smelters was on my 2025 bingo card. But I get the rationale. Pure tolling businesses are tough—they get squeezed on both sides, making pennies on the dollar. Just look at some of the O&G midstream pure players for a cautionary tale. Vertical integration can help, but the financial pitfalls are still significant, as I’ve talked about at length. Even in the liquid and diversified copper market, we’ve seen Chinese smelters shut down due to negative TC/RCs. Full nationalization? Sends shivers down my spine. But a well-structured public-private partnership to onshore critical processing capabilities? That’s a conversation worth having. A few potential middle-ground structures: ✅ Anchor offtakes & pricing mechanisms – Government-backed purchase agreements to stabilize margins. ✅ Debt guarantees or credit support – Lower the financing risk for private capital. ✅ Hybrid ownership models – Similar to energy infrastructure, with partial public ownership or strategic equity stakes. ✅ Tax incentives for domestic processing – De-risking the capital investments needed to build new capacity. The need to onshore and derisk critical mineral supply chains isn’t going away. The question is how we structure it to attract capital while ensuring resilience. What do you think—are there models from other industries that could work here? 🔗 https://lnkd.in/gdiYK2nn

There was a time when traders focused mainly on the Federal Reserve. Now, many are watching the White House just as closely. In recent months, the Trump administration has started taking direct ownership stakes in several US-listed companies. The stated goal is to strengthen supply chains in industries considered strategically important, such as semiconductors, defense, and critical minerals. This approach represents a major shift in US economic policy. Previous administrations, especially Republican ones, avoided direct government participation in corporate ownership. The companies involved so far include Intel, MP Materials, Lithium Americas, and Trilogy Metals. Each time a new investment was announced, the company’s share price rose sharply as investors anticipated future government support and additional funding. For example, MP Materials’ shares increased by around 95 percent after the Pentagon acquired a 15 percent stake. As a result, traders and analysts are now trying to anticipate which firms might be next. Some are using artificial intelligence to analyse government documents and policy statements to identify potential targets. Supporters argue that these investments will help rebuild US industrial capacity and reduce dependence on China for key materials. Critics see it as a form of state capitalism that risks distorting markets, creating inefficiencies, and politicising corporate performance. For now, investors are treating government involvement as a bullish signal, but the long-term effects are uncertain. The key question is whether this experiment in government ownership strengthens national resilience or blurs the line between public policy and private enterprise.

‼️ Everyone Wants SAF. No One Wants to Pay for It ‼️ So — How Do You Finance a £500M+ Clean Fuels Project⁉️ Let’s be blunt: SAF plants are not being built because of financing. High-CAPEX projects like SAF, e-fuels, methanol or hydrogen rarely die in the lab — They die in Pre-FEED, FEED or just before FID when the money actually needs to move. So let’s simplify the landscape. If you’re building a plant, here’s what your financing journey really looks like: 1. Pre-FEED / Pre-Development Stage Goal: Prove you’re credible enough to justify deeper due diligence. ✅ Typical funding sources: • Founder equity / angel capital — painful but essential skin in the game • Innovation grants (e.g. UK AFF, EU Innovation Fund, DOE in the US) • Strategic partnerships with tech licensors or feedstock suppliers (often in-kind support rather than cash) What works best? ➡️ Grants + early offtake LOIs — your only real credibility anchor at this stage. ⸻ 2. FEED / Advanced Development Stage Goal: Turn assumptions into engineering-grade numbers. ✅ Typical funding sources: • Blended public-private grant structures (e.g. matched funding) • Corporate venture capital (CVC) — but only if you’re aligned with their supply chain needs • Convertible debt from strategic partners (airlines, fuel suppliers) What works best? ➡️ Grants + CVC + strategic equity, but only if you can prove future revenue. ⸻ 3. FID / Construction Stage – The Real Cliff Edge Goal: Secure bankable contracts so lenders stop seeing you as “experimental.” ✅ Funding instruments that actually close deals: • Project finance (with senior debt + mezzanine) — only unlocked after offtake contracts & feedstock secured • Revenue Certainty Mechanisms (e.g. UK GSP, US 45Z, EU FEETS allowances) • Export Credit Agencies (ECAs) — massively underrated, especially for equipment-heavy builds • Loan guarantees from governments (e.g. US DOE LPO model) What works best? ➡️ Long-term offtake + GSP/45Z or similar policy-backed price floor. TL;DR — Here’s the Brutal Truth Technology without bankability is just a science project. Policy gives confidence. Offtakes give leverage. Guarantees unlock capital. If you’re stuck between FEED and FID and don’t know which lever to pull first — you’re not alone. That’s exactly the gap we help close at StratX: bridging strategy, partners and financing pathways so real plants actually get built. Let’s talk!