Connect with us

Hi, what are you looking for?

Economy

Private cash, spurred by public funds, should drive EU investment, ministers say

By Jan Strupczewski

BRUSSELS (Reuters) – Europe’s investment needs for the green and digital transition, along with defence and research, should use public funds primarily to attract and boost private investment, EU finance ministers said on Monday.

Their statement, which confirms details from a draft seen last week by Reuters, will form part of EU discussions on competing with China and the United States in advanced technologies while cutting CO2 emissions.

Last month, former European Central Bank president Mario Draghi estimated the EU needs up to 800 billion euros ($870.80 billion) in annual investments – up to 5% of its GDP – to keep pace with global rivals.

EU finance ministers said they cannot meet this sum alone, highlighting the need for strong capital markets to draw private funds as public finances have been depleted by multiple crises.

The limited public funds were “best used as a catalyst for leveraging private capital in areas with positive spillovers,” the statement said.

Leveraging in this case means using a relatively small amount of EU funds to cover the riskiest parts of a project, thereby drawing private investors to the safer, more profitable segments.

The ministers met on Monday ahead of an EU summit on competitiveness on Nov. 7-8 in Budapest.

They also expressed willingness to spend EU taxpayer money on services and infrastructure that benefit all 450 million citizens across borders, labelling these as EU public goods.

“While private investment is vital, public financing also has an important role to play. European financing should focus on areas where public goods can be more effectively delivered jointly,” the statement said.

Germany and other EU nations have rejected further joint borrowing due to debt from the COVID-19 pandemic, but ministers have said cross-border electricity grids are essential in securing lower, stable energy prices for businesses.

($1 = 0.9187 euros)

This post appeared first on investing.com






    You May Also Like

    Editor's Pick

    Sen. JD Vance (R-Ohio) and Minnesota Gov. Tim Walz (D) will face off Tuesday night at a CBS News vice-presidential debate in New York....

    Latest News

    A North Korean defector who escaped to the South more than a decade ago was detained after attempting to cross back into North Korea...

    Economy

    A U.N. human rights group confirmed Hamas’ leader in Lebanon, who was recently killed by Israeli strikes, was their employee.  Fateh Sherif was killed...

    Investing

    Astron (ASX:ATR) and Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) have completed the establishment of a joint venture to advance the Australia-based Donald rare earths and mineral sands...

    Disclaimer: balanceandcharge.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 balanceandcharge.com