Financial

How Government Officials Decide What Projects to Finance?

Governments invest in infrastructure projects to create long-lasting benefits for citizens and for small communities. This is why if ever is to request for funding, their chances of getting an approval is high.

This is done by financing the construction of new roads, bridges, airports and other facilities. Governments assess whether a project is a good investment based on three principles:

  • Financially sound
  • Positive impact on society
  • Meet its medium-term objectives

Be Financially Sound

The first principle that governs politicians’ decisions on what infrastructure projects to finance is that the project should be financially sound.

This means that the project should generate enough revenue to cover the costs of building and operating it. Governments typically finance infrastructure projects by issuing long-term bonds. Investors are interested in buying government bonds because the interest rates exceed what they would earn if they invested in other assets.

Governments use the revenues from infrastructure projects to service the debt they issue to finance construction.

Have a Positive Societal Impact

This is measured based on the number of people who stand to benefit from the project. The larger the number of people who benefit from a project, the better the project score.

A positive societal impact can be achieved by improving people’s quality of life, protecting the environment, and strengthening the economy.

For example, building a new bridge over a river is likely to improve the quality of life for people who live nearby by shortening their drive to work and school. Building a new airport is likely to protect the environment by reducing the number of airplanes that fly over heavily populated areas. Building a new power plant is likely to strengthen the economy by providing an additional source of energy.

Meeting Medium-Term Objectives

These objectives include strengthening the economy, improving people’s quality of life, protecting the environment, and meeting government priorities. For example, building a new highway connecting two major cities helps strengthen the economy by reducing the cost of transporting goods between those cities.

Building a new sewage treatment facility helps improve people’s quality of life by reducing the risk of water contamination.

Building a new airport runway helps protect the environment by reducing the number of airplanes that fly over heavily populated areas.

So long as these principles are met when requesting government funding, there is a high chance to get approval for your desired project. The process may take a little while but once approved, it’ll all be worth it.

Finance of Politics

How Cryptocurrency Investing Made Spain Teens Gamble Away Their Future

Cryptocurrency and money

 

The country has long been very relaxed in dealing with virtual currencies. Victims are mainly young people who are socially marginalized

Elena Moreno was just 17 years old when her boyfriend’s mother incited her to invest in cryptocurrencies. She invested her first self-earned 50 euros in Bitcoins. It all sounded good, especially after the financial crisis that left so many people without funds and young people without jobs. Another thing that makes investing in Bitcoin more exciting is using Bitcoin trading AI.

Elena was in the best circles, even Spanish celebrities invested in Bitcoins, and there were soon the first crypto ATMs in Spain. But as quickly as Moreno went up financially, she also lost everything again: “In the end, everything was opaque for me and felt like in the casino,” says the Catalan, who is now doing a forestry education and prefers to earn money in the real world. She no longer wants to know anything about online academies and financial markets: “I avoid what is sold virtually.”

As in the casino

Ibai Artola is different. He is a crypto expert and is now also a financial advisor. The young farmer from the Basque Country actually wanted to be at the Madrid mega-event “Mundo Crypto” on Saturday: “But unfortunately I couldn’t because we are building a new office.”

“No way back”

7000 visitors informed themselves about better investment strategies and other crypto courses. In the run-up, there was a lot of polemic because minors from all over Spain made a pilgrimage to Madrid. The Basque sees the danger that some will fall for the quick money like in the casino, but he warns against scaremongering: “There is no way back. Virtual currencies remain, no matter what horror scenarios conventional investors warn against.”

The negative news on cryptocurrencies has not stopped in Spain recently after the country handled it loosely for years.

It started with a festival in a socially difficult suburb of Barcelona in April. Thousands of minors became crypto fans after the conferences and courses, who then gave up their social lives to get rich, like the speaker.

 

ALSO READ: Accounts of Crypto-Funded Political Campaigns

 

Warning from the authorities

Under pressure from desperate parents, the Financial Market Authority decided to better control advertising for crypto assets. She warned before the event “Mundo Crypto” in Madrid. Some of the advertising companies are dubious and not registered in Spain.

Madrid is a crypto stronghold in Europe. Spain generally has fewer inhibitions towards sects or similar problematic organizations, which is why it has long been watched as the youth were openly seduced with crypto promises.

Sects appear openly

The US sect Scientology is allowed to flaunt itself openly in the center of Madrid, for example, and the Spanish order Opus Deí, which is controversial elsewhere, is trying everywhere to win students over to its ultra-conservative teachings.

In addition, there is a propensity of the Spaniards for gambling. They have the largest lottery in the world and almost 700,000 registered gambling addicts – more and more of them are teenagers. This has also shaken up the Ministry of Consumer Affairs: Advertising for betting shops has been banned since 2021. The fact that Americans such as the IM Academy chose Spain as a location also has to do with the fact that virtual currencies have not had a bad reputation here so far. Until recently, they were even massively promoted, especially the technology on which they are based: blockchain.

But the mood is slowly tipping. Some celebrities who were supposed to appear at the industry meeting in Madrid and invest in virtual currencies themselves have backtracked due to the negative news.

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