EU Finance Ministers Advocate for Increased Private Investment

In a recent meeting, EU finance ministers emphasized the importance of using public funds to promote and increase private investments to meet Europe's green and digital transformation, defense, and research needs. The ministers, who met on Monday, will discuss this approach in more detail at the EU Competitiveness Summit scheduled for November 7-8 in Budapest.

The consensus among the ministers is that the estimated €800 billion needed annually for the European Union to compete with global powers like China and the U.S. cannot be met solely through public financing. This amount, which could reach up to 5% of the EU's GDP, is deemed crucial for advancing high-tech sectors and reducing carbon emissions.

Considering the already limited public funds due to various crises, the ministers propose using these funds in the most effective way to mobilize private capital. This strategy involves using EU funds to secure the riskiest parts of investments, thereby encouraging private investors to contribute to less risky and more profitable segments of projects.

The ministers also expressed their readiness to invest taxpayers' money into services and infrastructure that provide widespread benefits across the continent. For example, cross-border electricity networks that could help provide lower and more stable energy prices for businesses could be assessed within this framework.

This financial approach comes at a time when Germany, in particular, is less inclined towards greater joint borrowing among EU countries due to debts arising from the COVID-19 pandemic. The ministers' statements reflect a broader strategy to balance the roles of public and private financing in achieving the EU's ambitious goals.