Significant Financial Investment Needed for EU's Climate Transition

Joachim Nagel, a member of the European Central Bank (ECB) Governing Council and President of Deutsche Bundesbank, has highlighted the enormous financial requirements for the European Union's shift towards a greenhouse gas-neutral economy. Speaking at the Adam Smith Business School, Nagel pointed out that the EU needs to invest more than €1.2 trillion each year, which is nearly 8% of its GDP, to achieve its 2030 climate targets.

Germany's Investment Requirements

According to Nagel, Germany alone must invest €390 billion annually from 2021 to 2030. He also mentioned that the investment burdens would be shared among households, firms, and the public sector, with bank loans likely playing a key role in external financing. "The private sector must take on the bulk of these investments," Nagel concluded, emphasizing the critical role of private investment in meeting the EU's ambitious climate goals.