According to a report that the NGO Finance Watch published on Tuesday, 16 July, capital markets will reportedly only be able to fund a third of the investments that the European Union needs to implement its 2024–2029 strategic agenda, which the 27 heads of state or government adopted last June (see EUROPE 13441/1).
The NGO examined the conditions under which private capital could be deployed and has concluded that even a fully operational capital markets union (CMU) (see EUROPE 13394/1) and a sustainable finance agenda would not be sufficient to avoid a future investment crisis.
Finance Watch notably points out [in a press release] that if global temperatures reach +3°C by the end of the century, the fiscal and social costs would reach levels that could be “unbearable” for public finances.
“With well-targeted regulation and a lot of political will, we think capital markets can fund up to a third of the EU’s climate needs, in cases where the financial yield is sufficient. But if the other needs are not funded and the EU is exposed, among others, to unmitigated climate change, governments will face much higher fiscal costs in future”, argued Thierry Philipponnat, the economist who authored the study.
Finance Watch has asked the European Commission to conduct its own assessment by quantifying the contribution that a successful CMU could make to the EU’s sustainability and strategic goals.
See the report: https://aeur.eu/f/d1y (Original version in French by Bernard Denuit)