Presidents, Commissioners, Ministers, Excellencies, Ladies and Gentlemen,
It is a pleasure to welcome you to Luxembourg and the first EIB Group Forum.
The Grand Duchy has been a generous host to European institutions, ever since 1951 when Robert Schuman, who was born in the valley just behind us, proposed bringing together the industries of war – coal and steel – into what became a community of peace and prosperity: the European Union.
Indeed, the building we are in today is where ministers from all over Europe meet in April, June and October each year to discuss our Union’s most pressing problems. A fitting place, therefore, for us to do the same thing.
Some of the challenges we will discuss today and tomorrow have been with us for some time, such as climate change and environmental destruction.
Others, like the resilience of a globalised economy, took on a new turn after the pandemic, for which we were so unprepared.
And then came the war in Ukraine, which exposed the fault lines between democracy and authoritarian regimes, which some governments had neglected far too long.
The interconnected world we thought we knew so well now looks very different.
What is clear is that the new environment requires all of us to adjust and, in some cases, reinvent the wheels that move us. Hence the theme of this Forum: “Adapting to a changing world”.
Throughout its history, the European Union has shown that it can adapt. Europe has been forged in crisis, as Jean Monnet famously said, and always emerged stronger.
The question today is what needs to be done, so that - in fact - the entire world emerges stronger from the current polycrises.
Ukraine
Ladies and gentlemen,
Russia’s invasion of Ukraine just over a year ago was a reality check for us all. The strategy of pacifying Putin, most notably by allowing our economies to become dependent on Russian fossil fuels and commodities, proved a tragic mistake.
We should have known better!
But inspired by the Ukrainian people’s own resolve to resist Russian aggression, we responded decisively.
The European Union provided not just economic support, including nearly €2 billion from the EIB, but also direct military aid, for the first time in its history. And it imposed far-reaching sanctions that will cripple Russia’s economic potential in the years ahead.
European unity was preserved and NATO’s appeal and relevance were strengthened, not weakened.
Europe is more resolved than ever to help Ukraine win this war and find a future place within the European Union.
At the European Investment Bank, we continue to explore all possible options to support Ukraine in 2023, by combining our own resources with guarantees from the EU and its member states. Just two weeks ago, our shareholders authorised us to start fundraising for a new trust fund to continue supporting Ukraine.
You can count on me to do whatever it takes to ensure that EU support continues and that we help rebuild a victorious Ukraine.
It will be a Herculean task, no doubt, but that’s just one more reason to start with it now!
It is important to put the emphasis on now. Some people think that we can wait until the ink on a peace treaty is dry. This would be a grave mistake. If we wait, the price will be even higher.
Energy crisis and climate transition
Ladies and gentlemen,
The war in Ukraine exposed the fundamental weakness of a growth model based on fossil fuels sourced in authoritarian countries.
But even before the first tanks rolled across the border, cutting our dependency on fossil fuels was necessary to stave off climate disaster.
The EIB was the first international financial institution to stop financing unabated fossil fuels altogether.
Now, everyone realises that the green transition is also a critical security imperative, the foundation of a sustainable and inclusive growth model for the EU and the world as a whole.
Financing the energy transition is, therefore, at the core of our discussions here today and tomorrow.
As the International Energy Agency reminded us last week, gas prices in Europe have fallen back to their levels before the war but are still three times higher than their long term average.
European companies and consumers continue to pay much more for gas and electricity than their peers in the United States and China. This is creating a huge drag on our economy and distortion of competition.
The risk is that, as our economy slows, investment will suffer further. This would be tragic. We need to invest more in the green transition to safeguard the future of our planet in the medium and long term.
Investment is needed also to boost the resilience of our economies: resilience in the face of future blackmails from despots, resilience in the face of a changing climate that will test the limits of our infrastructure, our food and water supplies, as well as our cities.
The European Investment Bank increased its clean energy financing to €19.4 billion euros last year, a record high.
And with our package of support for the REPowerEU initiative, we are going still higher.
We will provide an additional €30 billion in loans and equity financing over the next 5 years for renewable power and energy saving projects, on top of our regular lending. And we could increase this amount even further, should our shareholders so wish!
EU competitiveness
Ladies and gentlemen,
We urgently need investment to preserve the competitive edge of Europe’s economy. By investing – and only by investing – can we ensure that our continent remains an attractive place do business, a place where innovation thrives, where new ideas flourish, and wealth is created.
If we stop being competitive, if we stop innovating, then the European socio-economic model – the social market economy that we are all so proud of – will not be sustainable.
In an ageing society, productivity growth is the only way to preserve welfare and geo-political relevance.
Yet, productive investment in Europe is a whole 2% of GDP lower than in the United States.
This gap opened up a decade ago and it hasn’t closed yet.
China, which already dominates manufacturing of photovoltaic panels and batteries, as well as controlling essential supply chains, is investing heavily in the industries of the future.
While the recent US push to invest in and to develop new clean technologies is most welcome, we must not be naïve: if there is one area where the EU has managed to preserve a competitive edge, it is at the intersection of green and digital technologies, but it is a razor thin edge.
Local production and content requirements inside the IRA provide a powerful pull on some of our most innovative firms to re-locate to the US. It is important that we seek dialogue with our American partners to mitigate this effect.
But we also need to realise that the threat of IRA – and Chinese protectionism for that matter – is just the tip of the iceberg when it comes to the challenges for EU competitiveness going forward.
We have been doing too little for too long to just be blaming others for wanting to catch-up!
At the EIB, we are ready to play our role in a European investment initiative that supports EU competitiveness and maintains a level playing field across the single market.
The European Investment Bank has the capacity to become a key financial pillar of an initiative to prepare us for the Net-Zero Age. How?
We have the resources to increase our support for the REPowerEU plan from the current €30 billion say to €45 billion. This would mobilise over €150 billion of investment. This is of course subject to discussion with our governing bodies.
And we can do even more if the right measures are put in place: because one thing is clear. While we are in a very solid position, I will not put the financial health of this institution at risk. Our bank is rock solid and it will remain so.
Ladies and gentlemen,
We must be motivated by the recent policy announcement in the US and double down on our own path to net-zero and green and digital technological leadership.
We should blend EU funds, incentives, and favorable loans into simple financing instruments that help super-charge the transition for all EU member states, not just the ones with pockets deep enough to offer state aid.
We don’t lack the financial resources to do it. We just need the political will and a plan that will give investors certainty and crowd in private capital.
I don’t think we need large scale subsidies. On the contrary, such schemes are likely to be counter-productive in an inflationary environment. Instead, what is needed is a swift, targeted, and European investment push!
This also means reforms, by the way: cumbersome administrative procedures make the life of our entrepreneurs so difficult that they often prefer to develop and expand their activities outside the EU. I speak from experience: our bankers have a huge pipeline of green industrial projects, but our clients are waiting for permits, stuck in bureaucracy.
Meanwhile, despite the successes of the single market, our capital markets union is still incomplete, and our banking union is a work in progress. So, when European firms need to raise capital, they often turn elsewhere, where investors have deeper pockets
The European Tech Champions Initiative that was just launched by Member States and the EIB Group is a step towards changing the game by providing indirect, late-stage growth capital, so that emerging technologies made in Europe, stay in Europe.
I am proud of this initiative as it puts into the spotlight the fantastic work that our subsidiary the EIF as engine of the European start-up scene. With the Tech Champions initiative, we now go one step further and help the very same start-ups that we have been supporting for years to grow into the scale needed to leave a global impact.
In the same spirit, we stand ready to work with the European Commission and Member States to create a new vehicle for Europe to provide high-risk financing support for its green industrial future. A new pan-EU fund that supports large-scale EU projects of strategic importance and provides risk finance for breakthrough technologies.
I very much welcome the support from many directions – including the European Council – for the EIB Group to act as a financial backbone for such an initiative.
Global Partnerships
Ladies and gentlemen,
Autonomy and security come from cooperation and partnership. Europe’s influence in the world will only be as strong as its willingness and ability to work with others: a partnership of equals, sharing and pursuing common goals.
The green and digital transitions cannot happen in Europe alone. From climate change to the COVID-19 pandemic, the challenges we face are global. We are all in the same boat. We either rise to these challenges or we sink together.
That’s the rationale behind the EU’s Global Gateway, a plan to promote sustainable, inclusive growth across the world with investments that do not lead to toxic dependencies.
The EIB, via its development arm, EIB Global, is well on track to facilitate at least one third of the €300 billion of investment that Global Gateway aims to support by 2028.
Europe needs to step up its political and economic presence in the world and make its voice heard. EIB Global is a key part of this effort. This is essential work.
I am convinced – but that is no news – that given the new geopolitical realities, the foundation of EIB Global last year was spot on and that it needs to grow into a fully-fledged subsidiary, with even more firepower to provide the EU with the necessary financial clout to pursue its strategic objectives in the world.
It’s time for Europe to put its money where its mouth is. And the EIB – EIB Global – stands ready to play its role in this.
Ladies and gentlemen,
Let me conclude, I look very much forward to listening to your exchanges over the coming two days.
Your work here will help us to deepen our understanding of the challenges we face and our capacity to rise and meet them. I am sure we will all learn a lot.
Thank you for being with us.