The DLA Piper European PPP Report 2007 was upbeat and buoyant, reporting on an expanding market with good prospects for sustainable growth. By the end of 2007, the market had changed dramatically, coming close to stopping in its tracks. The spread of the banking crisis has brought about a re-evaluation of whether funders can provide long term, highly leveraged project finance, given the lack of confidence in refinancing options and in capital markets. Deals have closed, but on significantly higher margins and more aggressive terms, with general difficulty in reaching financial close in a timely manner on even the best of projects. Equally, the public sector has been suffering with a reduction in tax revenues and big holes in government budgets, together with rising unemployment and social expenditure. Thus, governments have had to look hard at their economic policies and decided whether they should use spending on infrastructure as an anti0cyclical measure.