Wind of change: Investment in Central, Eastern and South-Eastern Europe (EIB, September 2017)

• Wind of change: Investment in Central, Eastern and South-Eastern Europe

• Published by European Investment Bank (EIB) in September 2017

• PDF available: https://www.eib.org/attachments/efs/economics_study_wind_of_change_investment_in_cesee_en.pdf

• Summary:

  • The report notes that the investment in the CESEE region "has been higher, but also more volatile, than in the EU over the last two decades. The financial crisis resulted in a slowdown in capital formation, which contributed to lower growth. Public investment supported by EU funds has been robust, whereas private capital formation has been lagging."

  • The region has traditionally relied on foreign capital flows, and the level of both private and public investment has been below the levels previously established in countries with similar economic trends. "The CESEE region underperforms the EU average in the vast majority of strategic and competitiveness indicators, with some exceptions in the realm of human capital."

  • According to the report, "CESEE firms are more likely than the EU average to report that they had invested too little over the previous three years. Uncertainty about the future, business and labour market regulations, as well as availability of staff with the right skills are the main long-term barriers to investment."

  • The report also analyses the role of the EU funds and capital market developments in the region and presents elements of a new growth model for the region.

  • The report also states the importance of increasing energy efficiency of housing in some countries of the region. Bulgaria and Estonia are singled out in the report. "According to the European Commission, Bulgaria is the least energy-efficient economy in the EU when it comes to industry, transport and housing"

  • Keywords: EU, Europe, investment, investors, corporate landlords, real estate, financialisation, financialization, South-Eastern Europe, South-East Europe, Eastern Europe, Central Europe, European Investment Bank, EIB, Bulgaria, Estonia, energy efficiency, EU funds