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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. 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.
Commenting on the report’s findings, EIB Vice-President Andrew McDowellsaid: “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.”
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.
EIB Investment Report 2019/2020