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    The COVID-19 crisis ripped through the European economy, shutting businesses for months and severely curtailing activity. Decisive action by the European Union and its member governments, however, helped to keep many businesses afloat and limited the rise in unemployment.

    The strong response, which effectively made up for lost sales at many businesses, has also been instrumental in sparing investment from cuts. Ensuring that investment is maintained will be crucial to Europe’s transition to a greener and more digital economy.  

    • 49% of EU firms suffered a decline in sales due to the pandemic, compared with 21% that were able to increase sales.
    • Firms that were less productive before the crisis felt a bigger impact, while digital firms proved more resilient.
    • Sales dipped more for small firms (down at least 25%) than for medium-sized and large firms.

    Looking forward, the economic landscape has changed, and European firms need to change with it. The good news is that the pandemic encouraged many businesses to speed up their digital transformation, while others are waking up to the reality of the climate transition. And while the shock weighed on firms’ investment plans in the short term, government support appeared to soften the impact.

    • The number of firms carrying out investment in the last year declined to 79% from 86% in 2019.
    • Faced with lower sales, 23% of firms pulled back on their investment plans, while only 3% planned to invest more.


    About the report

    The European Union Overview of the EIB investment Survey 2021, provides a unique insight into the corporate investment landscape in the European Union. It examines companies' financing needs and the constraints they face. The 2021 survey delves into the massive shock created by the COVID-19 crisis, and the response and recovery programmes put in place by the European Union and by national governments. The survey is based on interviews with 12 000 companies across the 27 European Union countries, and it includes a benchmark sample from the United Kingdom and the United States. This overview provides the aggregated results for the European Union. Results for individual countries will be published in January 2022.

    A full analysis of the survey results and investments in Europe is available in the EIB Investment Report 2021-2022.


    Governments step in

    Government programmes to prop up businesses and shield them from the economic crisis largely worked. In Europe, support ensured firms had access to credit, and governments sometimes picked up labour costs so employees could keep their jobs. The efforts seem to have effectively targeted firms facing the steepest loss of revenue. Also, firms that received support were more likely to keep their investment plans intact.

    • 56% of EU firms received some kind of policy support in the form of guaranteed credit, support for social security contributions or delayed payments.
    • 35% of European small and medium-sized enterprises (SMEs) in manufacturing and services said they would have faced an existential threat to their business without government support.*

    The efforts seem to have effectively targeted firms facing the steepest loss of revenue. Also, firms that received support were more likely to keep their investment plans intact.


    A changed economic landscape

    The pandemic is ushering in a new era of digitalisation, and European firms are racing to catch up. At the same time, firms are starting to feel the effects of climate change, and they are worried about the impact climate change will have on their operations and on future opportunities.

    • 55% of firms say the pandemic has prompted a greater need for digitalisation. 46% of firms say they have become more digital.
    • Among firms that do not yet use advanced digital technologies, 34% took the crisis as an opportunity to start their digitalisation journey.
    • Around 58% of EU firms are worried about the physical risks of climate change, particularly in regions that have experience extreme weather.
    • 43% of EU firms invested to tackle climate change. The share of firms planning climate-related investment has now risen to 47% from 41% in 2020, despite the pandemic’s toll.

    The recovery is also putting additional pressure on firms, which increasingly say that a lack of skills, high energy costs and transport infrastructure are hampering their ability to grow and to meet the recent spike in demand.


    Policy has a role to play

    Governments now need to change tack and support investment. Credit is plentiful – only 6% of SMEs and 3% of large firms say they have problems raising funds. But the pandemic has limited the ability of some firms, particularly in Southern Europe, to finance investments with their own funds.

    Targeted financial incentives could promote the transformative investment in digitalisation and climate change that Europe requires. European firms that received incentives to digitalise in the last three years, for example, were almost twice as likely to invest more in digitalisation as a response to the pandemic.*

    As financial and economic conditions return to normal, policy needs to focus on accelerating the momentum for green and digital investments that will ultimately make Europe more competitive. To do so, though, Europe must deal with key investment barriers:

    • 79% of firms say that a scarcity of workers with the right skills is standing in the way of their growth and investment plans.
    • Uncertainty about regulatory environment and taxation are hampering firms’ investments in climate change.*

    To stimulate investment, the European Union needs to set a clear path for decarbonisation and increase the financial advice and technical support available for climate investments.



    *Based upon the EIBIS 2021 Add-on Module — sample of EU small and medium-sized enterprises in manufacturing and services (2021).