Short list of findings:

  • Economic climate in the EU is worsening and investment by EU firms is likely to slow down in 2020
  • EU climate mitigation investment stagnating and behind US and China
  • Europe needs to accelerate adoption of digital technologies to stay competitive

European firms are becoming increasingly pessimistic about the economic outlook according to the new EIB Investment Report 2019/2020. The report also finds that investment in climate change mitigation is lower than that of major economies like the US and China. Infrastructure investment is stuck at 1.6% of EU GDP, the lowest in 15 years and Europe is failing to reap the benefits of digital transformation.

Original article entitled EIB Investment Report 2019: Uncertainty Weighing on EU Firm Investment; Published by EIB here on 26 November 2019

The report, which reflects the results of the annual EIB Investment Survey (EIBIS) of 12,500 European businesses, recommends that the EU take advantage of historically low interest rates, increase public investment, catalyse private investment and promote efficient financial intermediation to tackle the slowdown.

“Europe cannot afford to wait out another cyclical downturn. After a lost decade of weak investment, we need to tackle the slowdown now if we are to respond to the historic challenges we are facing. The EIB, as the EU’s financial arm and climate bank, has played a crucial role in kick-starting investment in Europe after the financial crisis and we now stand ready to further support investment for a more sustainable and competitive European economy.”

Commenting on the report’s findings, EIB Vice-President Andrew McDowell 

Read the executive summary

Read the country-level analyses

The report was presented at the EIB’s Annual Economic Conference, which is jointly organised with the OECD, Columbia University and SUERF, in Luxembourg. The conference brought together high-level speakers such Sir Nicholas Stern and Mariana Mazzucato and chief economists of the European Central Bank, European Stability Mechanism, OECD, European Bank for Reconstruction and Development and the World Trade Organisation.

“We have to accelerate investment to fully exploit the benefits of the digital revolution, realise our climate goals and rebuild Europe’s social cohesion. There is a long list of investments that require public intervention or a private sector that finds the right conditions to overcome uncertainty: firms’ digitalisation, innovation and business dynamism as well as smart delivery of infrastructure and public services, green innovation and energy efficiency, and e-government, e-learning and e-training.”  

According to Deborah Revoltella, Director of the EIB’s Economic Department, while presenting the report. [ . . . ]

EU climate investment not on track

The EIB Investment Report shows that, although substantial progress has been made, climate action investment in the EU is not yet on track. To achieve a net zero-carbon economy by 2050, the EU must raise total investment in its energy system and related infrastructure from 2% to 3% of GDP on average.

The European Union invested EUR 158 billion in climate change mitigation in 2018. At 1.2% of GDP, this is now marginally less than the United States (1.3%) and little over a third of China’s performance (3.3% of GDP).

While the United States leads in climate-related R&D spending, China has recently quadrupled its spending, overtaking the EU.

Europe’s weak performance in climate-related R&D is a threat to its competitiveness, given the importance that still-immature technologies will have in the transition.

To continue reading the original article, link here.

Another Perspective from ClientEarth foundation to the EIB 2019/2020 Report

Response to this report per the official News release from ClientEarth.org of 13 November 2019, entitled Major Step Forward: European Investment Bank to Stop Funding Fossil Fuel Projects, original publication here

ClientEarth welcomes the European Investment Bank’s landmark lending policy and the Board’s decision to exclude gas finance from it.

“The EIB has set the standard for banks worldwide with this move – and clearly signalled that oil, gas and  coal lending is inconsistent with the Paris Agreement goals. This is a major step in the flight of capital from fossil fuels. While we are disappointed to have seen such strong initial pushback from countries like Germany, which claims high standards on climate, the passing of this policy shows a change of gear for clean investment.“

ClientEarth lawyer Peter Barnett

Although the policy will kick in at the end of 2021, a year later than previously proposed, ClientEarth lawyers have warned that any decision to fund new gas or other fossil fuel projects before then would not be in line with the Paris Agreement and will risk legal challenge.

For further reading the original article by ClientEarth.org: link here.

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