EIB Investment Report 2021/2022 - Key findings E-Book

• Herausgeber: European Investment Bank
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 43

Veröffentlichungsjahr: 2022

Beschreibung

The massive resources the European Union is unleashing to rebuild after COVID-19 present a unique opportunity to deal with climate change and improve the ability of firms and individuals to compete in a more digital world. The Investment Report 2021-2022 examines how government interventions helped support investment and enabled firms to weather the crisis. The report's analysis is based on a unique set of databases and data from a survey of 12 500 firms conducted in the summer of 2021. These key findings, provide a short accessible summary of the main report's messages.

Leseprobe

EUROPEAN INVESTMENT BANK INVESTMENT REPORT

2021/2022

KEY FINDINGS

Recovery as a springboard for change

Disclaimer

The views expressed in this publication are those of the authors and do not necessarily reflect the position of the EIB.

About the European Investment Bank

The European Investment Bank is the EU bank and the world’s biggest multilateral lender. We finance sustainable investment in small and medium-sized enterprises, innovation, infrastructure, and climate and environment. For six decades, we have financed Europe’s economic growth from start-ups like Skype to massive projects like the Øresund Bridge linking Sweden and Denmark. We are committed to supporting €1 trillion in investment in climate and environmental sustainability to combat climate change by the end of this decade. About 10% of all our investment is outside the European Union, supporting Europe’s neighbours and global development.

The full version of the Investment Report 2021/2022: Recovery as a springboard for change era can be downloaded at:

www.eib.org/investment-report-2021

Introduction

Less than two years after the pandemic hit Europe, EU real gross domestic product (GDP) is back to pre-crisis levels, with the third quarter of 2021 marking a return to the level seen in the fourth quarter of 2019. Thanks to a rapid, large-scale and comprehensive policy response, the crisis seems to have left fewer scars than originally feared. At the microeconomic level, policy intervention prevented major disruption, but the resilience of firms and jobs to a full phasing out of support has yet to be tested, and further scarring may yet become apparent. At the macroeconomic level, uncertainty remains about the effect of new waves of the pandemic and the eventual phasing out of emergency economic measures across Europe, as well as the design of the new policy normal. Looking forward, the risk of a recovery that is asymmetric for individuals, firms and countries remains. Meanwhile, the challenges of the climate transition and digitalisation have become more urgent than ever, and the recovery offers an opportunity to address them.

This report looks back at the impact of the pandemic on individuals, firms and countries within the European Union. It also looks forward, at how to use the recovery as a springboard for transformation. Keeping an eye on investment, it looks at the effectiveness of policy support and assesses evidence of post-pandemic scars. It examines how European firms are using the pandemic and the recovery as an opportunity to prepare themselves for a changing world. It also discusses the role of public support in ensuring a just recovery, preventing rising inequalities.

While the swift policy action implemented so far prevented an economic depression, the recovery requires further coordinated efforts across Member States. To prevent an asymmetric recovery and raise long-term growth prospects, the following priorities are key:

•Maintain the momentum on high-quality public investment, assuring the implementation and maximum impact of the Recovery and Resilience Facility, while avoiding abrupt fiscal adjustments that may hinder the recovery.

•Catalyse private investment through risk-sharing instruments to mitigate ongoing macroeconomic uncertainty, including a shift from generalised support for firms to targeted incentives for transformation, particularly for digitalisation and the climate transition.

•Create the conditions for an acceleration of the digital transformation of the EU economy, with supportive infrastructure, information security and data governance, an acceleration of digitalisation in the public sector and an intensified focus on training and skills.

•Reinforce climate policy guidance and implement regulatory proposals to close the remaining gaps in the European Union’s decarbonisation strategy, including plans for the energy transition and the further integration of the EU energy markets, and provide the right incentives to capitalise on EU leadership in climate-related innovation.

This time was different: A massive shock to the European economy mitigated by a bold policy response

The pandemic’s immediate economic impact was unprecedented

The pandemic caused the steepest drop in output in Europe’s post-war history. By mid-2020, EU real GDP had fallen 14% relative to a year earlier, while the primary income of households had declined by 7.3% over the same period. Corporate turnover hit a trough in May 2020, with manufacturing revenue falling as much as 30% since the start of the year. Since then, as public health measures have become more selective, the European economy has begun to recover. However, new waves of the virus have hit countries in different ways, making the recovery more uneven and uncertain. Asymmetries are now emerging among sectors and between larger and smaller firms, and therefore across regions.

Throughout Europe, real gross fixed capital formation — a measure of investment — declined substantially, but less than predicted. Moreover, it took only two years for investment to recover from the pandemic shock, compared to more than a decade after the global financial crisis. By the end of the second quarter of 2020, real investment in the European Union fell by a dizzying 14.6% relative to the fourth quarter of 2019.[1