Banque de France and the European Investment Bank organised a conference “reactivating the investment channel” in the conference centre of Banque de France in Paris the 10 March 2017.
Opening the conference, Banque de France Governor F. Villeroy de Galhau noted that despite the ongoing recovery, there is still an investment gap in Europe and that the saving glut is now not so much related to high savings in emerging market economies but to low investment in developed economies. He posed the question of how to boost investment, suggesting three main factors holding it back: insufficient expected demand, the need to stabilise and clarify fiscal and regulatory norms, and the nature of external financing.
EIB Vice-President Ambroise Fayolle presented some of the key results of the first round of the EIB Investment Survey, or EIBIS, and described the progress the EIB is making in implementing EFSI, with particular reference to France. Natacha Valla of the EIM Economics Department focused on the survey results and their implications. The survey, based on 12.500 EU corporations, sheds light on the drivers behind the investment gap in the EU. It shows that business investment remains focused on improving the quality of capital stock to raise profitability, rather than expansion. In France, the investment share is above the EU and increasing. Moreover, the share of innovation is relatively high. Uncertainty and the labour market regulation are main impediments to higher investment.
The three panels with participants from both public and private sectors debated three topics:
- “Investment in France – achievements, gaps and remaining challenges”
- “Investment initiatives: small and smart or a Marshall plan for Europe?”
- “Investment finance, innovative finance and the role of public funds?”
Anita Fürstenberg (EIB Operations Directorate) described the implementation of the Junker plan in France as well as some new EIB product opportunities. She stressed the potential to further develop project financing and products related to risk-sharing products, energy efficiency and social housing.
Concluding the event, Debora Revoltella, Director of Economics at the EIB, thanks the organisers and praised the depth of the discussions. The recovery in investment is taking place, she said, but is still fragile so that the EIB and policy makers still need to continue taking supportive actions. She re-emphasised the importance of creating an conducive business environment, with specific policies required to address the mismatch between skills and business needs identified in many contexts.