European firms are becoming increasingly pessimistic about the economic outlook according to the new EIB report.
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.
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 McDowell said: “Europe cannot afford to wait out another cyclical downturn.”
He told this website, “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.”
“We have to accelerate investment to fully exploit the benefits of the digital revolution, realise our climate goals and rebuild Europe’s social cohesion,” said Debora Revoltella, Director of the EIB’s Economic Department, presenting the report.
“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.”