A report from the European Investment Bank (EIB), “Breaking down investment barriers at ground level”, has found that investment in the European Union is hampered by the difficulties small and mid-sized companies encounter in obtaining financial services.
The report also identified structural issues in the way the single market is set up that prevents investment, including the insufficient functioning of the internal market, as well as administrative burdens, regulatory fragmentation, and constraints of public-sector promoters to procure and implement large infrastructure projects.
In November 2014 the European Commission and the EIB launched the Investment Plan for Europe. Its three pillars promise were to (1) make smarter use of financial resources via the European Fund for Strategic Investments, (2) provide technical assistance to investment projects, and (3) remove obstacles to investment.
The European Investment Bank Group is particularly involved in the first two pillars of the plan.
EIB vice-president Ambroise Fayolle, presenting the reports in Brussels, said: “Today’s reports clearly show that incentivising investment with the help of financial instruments can only do so much. Red tape, weak project-planning capacities and fragmented markets often slow down projects that could improve Europe’s growth prospects. Therefore, working on how to remove obstacles to investment in a systematic way in all countries and regions as well as at EU level is so important.”
“This and other case studies in the report show that political will can overcome investment barriers. Doing so will unleash the single market’s full potential and build sustained economic growth and employment.”