EUROPEAN LONG-TERM INVESTMENT CONFERENCE : A new beginning for investment

Sharing a diagnosis
 

Why isn’t investment picking up? The confidence crisis and risk aversion run deep in Europe. They are sustained by uncertainty caused by geopolitical tensions, doubts about the integrity of the Eurozone and the Union, and market failures. Global demand is flat, while excessive debt and low competitiveness are a major impediment in many countries. The general consensus is that public investment and incentives are needed to restore confidence among private investors.

 

Internal market integration and public/private sector complementarity
 

How can we make the most of new opportunities to promote sustainable development? At present, large corporations are investing elsewhere and SMEs do not have the support they need to innovate, grow and win new markets. We will invite entrepreneurs to explain the difficulties they face in obtaining funds and due valuation of the return on their investments. Skills development and the implementation of new technologies and infrastructure across a more integrated and more attractive European market are essential to building a competitive and inclusive economic Union.

 

The transformation of the banking and financial system
 

While funds are plentiful, resource allocation channels are inadequate. The regulatory framework has been reinforced to ensure greater stability, but we still have to strike a better balance between prudence and the risk-taking needed to increase investment. Banks are reducing their balance sheets but new supplies of credit are essential. The shift to market-based financing has already begun but it must be properly organised. The role played by institutional investors and fund managers has to be substantially increased.

 

Macroeconomic policy and institutional reform
 

The European Central Bank is committed to supporting lending and business activity but it cannot be

expected to do everything single-handedly. The coordination of national economic policies must be stepped

up and improved; preparing a fiscal capacity for the Eurozone should not be further delayed.

The recovery plan consists not only of using available public funds and leveraging investment, it will also

require institutional reforms: a new role for the EIB, coordination between national public investment banks

and the Commission, the creation of European investment funds and so on.
 

The European Long-Term Investment Conference will open an economic and political dialogue calling for civil society involvement and more responsibility sharing and solidarity between the public and private sectors. It is being organised in response to a democratic crisis, the aim being to restore confidence and to move closer towards a common investment policy.