EIB President Werner Hoyer’s overview of 2022 activities at the EIB Group’s 2023 annual results press conference
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Ladies and gentlemen,
Welcome to today’s press conference – for the first time under our new logo which places the EU Bank’s visual identity clearly as part of the European family.
The EIB is the Bank of the European Union as the new logo makes it clear.
We contribute – with our financial and sectorial expertise - to meeting the Union’s many challenges.
A founder of our Union famously said, “Europe will be forged in crises and will be the sum of the solutions adopted for those crises.”
We are now in the midst of not one, but many crises, triggered by Russia’s senseless war of aggression in Ukraine.
Over my long career in the service of the EU, 11 years at the Bank and more than 25 years in foreign affairs, I have seen Jean Monnet’s wise words confirmed again and again. I have no doubt that – also this time - Europe will emerge stronger, wiser, and more united than ever.
In 2022, the EIB Group – that is to say the Bank and our subsidiary, the European Investment Fund - signed financing agreements totalling €72.5 billion.
Every euro went to projects that furthered sustainable, and resilient economies in Europe and beyond.
We delivered on our promises and exceeded our targets: at the beginning of 2022 we were anticipating a lower level of activity. That all changed, however, with the war.
Behind the massive numbers you can find real, tangible impact: we proved again that the European Investment Bank is among the world’s biggest supporters of human ingenuity and innovation:
Just as we financed BioNTech’s development of the first vaccine to beat Covid – and we are very proud of that we are now supporting next-generation biopharmaceuticals against cancer in Sweden. In Finland, we are backing the development and commercialisation of quantum computers. In Spain, we are helping turn used cooking oils into clean energy and harvesting solar power to produce green hydrogen.
Our economies in the EU were lucky to have so far been cushioned by government spending from the worst impacts of the war. But the energy crisis has depleted a lot of the investment budgets of both governments and firms, as well as raising the debt of private households. And that at a time when we have to invest more rather than less, both to combat climate change and to wean ourselves off Russian oil and gas.
Once again in such a situation of extreme crisis, investment suffers the worst.
Chronic investment gaps are certain to get a lot worse. When you exclude investment in housing, you see that productive investment in Europe is a whole 2% of GDP – per annum - lower in the EU than in the United States; a gap that opened up a decade ago and that is most certainly going to grow unless we do something, collectively, against it.
Before going into more detail about this, allow me a somewhat personal comment.
The tragic events in Ukraine are an opportunity to reflect on our past actions and our future conduct. We have seen the Ukrainian people respond with resilience and commitment.
Our own response to the crisis is a litmus test for our character as leaders and as policymakers! And as the meetings in Kyiv today and tomorrow demonstrate, the EU is in this for as long as it takes.
The horrible war in Ukraine has proved that decarbonisation is the only reliable and ethical way to ensure access to affordable energy for Europeans and the world at large.
It is clear to everyone that this is the way forward.
Russia’s blackmail over gas supplies shows that we, at the EIB, were on the right side of history when we decided to stop funding fossil-fuel infrastructure and focus our resources on clean energy in 2019.
And we were on the right side of history when in 2014, after the annexation of Crimea, we decided to stop our business in Russia and redirect our funds and possibilities to help to other parts of Central, Eastern and South Eastern Europe.
I am not putting into question the decision by many governments to find short-term solutions to the current energy crunch, of course – but as a long-term investor, it was – and it continues to be – the right decision to concentrate our resources on making the energy system of the EU economy cleaner and more sustainable.
Ladies and gentlemen, in 2022, our clean energy financing reached €19.4 billion, a record high.
At a time of extreme energy insecurity, we backed the upgrade of the Czech electricity grid with a loan of €790 million, our largest ever in that country.
In Poland, we provided more than 400 million euros to integrate renewables into the network. And in France we financed some of Europe’s first pre-commercial scale floating windfarms – a technology that will open deeper seas around the EU and the world to clean, renewable energy. It will be a game changer.
We are working along the whole value chain to accelerate the electrification of our economies, from supporting the production of advanced lithium-ion battery cells in the Netherlands to financing construction of a 1 000 kilometre-long submarine cable that will connect renewable power plants in Sicily and Sardinia to Italy’s grid.
And with our package of support for the REPowerEU initiative, we will do even more, providing an additional €30 billion in energy loans and equity financing for high impact energy projects over the next 5 years - that is, on top of our regular lending.
I am proud of what EIB did in 2022, and is doing, to help Ukraine directly.
As we speak, EIB financing is helping to build - or re-build - schools and health facilities from Odessa to Kyiv. Our technical assistance is helping Kharkiv get its war-ravaged trams back on their tracks. And our funds support emergency repairs to the country’s bomb-damaged roads.
Thanks to support from the EU budget, we were among the first to provide help for Ukraine’s government, to keep it going, as early as last March. Since then, we have disbursed €1.7 billion to Ukraine under exceptionally difficult circumstances. We have another €540 million still to disburse, as concrete projects on the ground progress.
This support does not fall from the skies: we have been one of the most active project financiers in the country for many years now.
Today, we are working with the European Council and the Commission to see how we can maintain our activity in Ukraine. Support for individual project financing, along with short term liquidity support, is essential to help the country’s economy.
The public discourse is often too narrow when it comes to support for Ukraine, focusing on military aid mostly.
Though I strongly support the military aid given to Ukraine, making sure that Ukraine’s economy stays afloat through concrete projects is in my view at least equally critical for the country to prevail. We must not forget that the strongest support for the Ukrainian forces on the ground comes from the country itself and its economy.
It would also be foolish to believe that re-construction can be funded exclusively by external sources: this will matter of course but the most important task has to be to ensure that the Ukrainian economy will be able to support large parts of the country’s re-construction effort itself.
This is where we need to focus our energy.
And that effort has to start today. We cannot wait until one day the ink on the peace treaty is dry.
The EIB had committed to raise its finance for renewable energies way before the war as part of our contribution towards Europe’s green deal. We remain committed to these goals.
Indeed, in 2022, we exceeded our commitment to dedicate half of our total financing to climate action and environmental sustainability. Our €36.5 billion of lending supported €147 billion in green investment. This was one part of our announcement at the UN Climate Summit in 2019. This puts us on track to meet our target of mobilising €1 trillion for climate projects this decade.
Over the past months, we have heard again and again discussions about slowing the green transition because of the war and its impact on fuel and energy prices.
If you allow me: This makes little sense. We must realise that that the question of energy security and the fight against climate change are two sides of the same coin.
The hard truth is that Europe needs to accelerate its switch to renewable energy, not just to meet its climate targets but also to cut its dependency on imports.
Unfortunately, it remains the case that for many areas of our economy, we still lack competitive alternatives to fossil fuels. Our economists estimate that about half of global greenhouse gas emissions come from activities for which clean alternatives are not yet available, at least at a commercially viable stage.
Investments in new climate technologies remain, therefore, a key area of attention for us.
If there is one area where Europe can still claim global technological leadership, it is at the intersection of green and digital technologies. Our economists estimate that the EU can claim 75% more patents in this area than the US and four times as many as China. Here we are still in the lead and we had better protect this position.
We must make sure that we do not lose out on this front now.
By providing substantial support for investment in key climate technologies, the US Inflation Reduction Act, provides a powerful incentive for investment resources to by-pass the EU.
Europe will need to find a clear response to this and we therefore welcome the ongoing discussions, and we are ready to be a part of them
The largest part of the investment needed to get to net zero will have to come from private funding – and the EIB Group has shown through EFSI and now InvestEU how it can help crowd in and mobilise such investment.
At the EIB Group, we will also soon have up and running a multi-billion fund of funds – the European Tech Champions Initiative - that will help keep European innovators – in particular those at a later stage - from moving offshore. It is to be managed by our subsidiary, the European Investment Fund.
We stand ready to be the backbone of an EU-wide investment initiative in strategically important sectors to strengthen Europe’s economy and European economic resilience, if mandated by our shareholders – the EU Member States.
Talking of sovereignty- we should not forget that Europe’s defence requires support. While the EIB does not finance guns or explosives, we back European security with financing in dual-use sectors such as aerospace and cyber-security.
Here, too, we exceeded our targets and delivered well over €1 billion last year.
In strengthening Europe’s strategic autonomy it is vital to agree on common European solutions that complement national ones.
Not all countries have equally deep public pockets. Unless we ensure that a recovery from the crisis stands on a level playing field, we risk distorting our most prized achievement- the cohesion of our single market.
Whatever Europe wants to do to respond to the many challenges we are facing, it is absolutely critical that we do it together. The damage – not just political, but also economic – from unbalanced measures at the country level cannot be over-stated.
This reminds me of when we were discussing our reaction to the Covid challenge 3 years ago, when Christine Lagarde on behalf of the ECB, Klaus Regling from the ESM and me on belhalf of the EIB Group, we went to the Eurogroup and to the Ecofin and we said “what we need in addition to the national measures is something that is “fat, fast, flexible and European”. Because anything else would undermine the integrity of the internal market.
I am glad to report that almost half (45%) of our financing inside the EU in 2022 was channelled to cohesion regions, again exceeding our targets.
Ladies and gentlemen,
Allow me one last remark: last year was marked by the establishment of EIB Global, our dedicated arm for the EU’s development and partnership activities.
And this was spot on!
In its first year of operations, EIB Global delivered – in addition to the €1.7 billion of financing for Ukraine - €9.1 billion in new project signatures. These included solar power plants in Brazil, further support for vaccination initiatives around the world, and making sure that the people of Jordan have access to clean water by funding one of the largest desalination plants in the world.
Our projects showcase how the EIB advances EU policies around the world.
Yes, the EU needs to further its strategic autonomy, but it will not achieve that by taking an inward-looking perspective. If we want to strengthen the EU’s resilience, we need to forge new, sustainable partnerships and alliances around the globe.
I am very proud that with EIB Global, we are making an active contribution to this under the banner of the EU.