EU's Ambitious Climate Goals Require Massive Investment

Joachim Nagel, a prominent member of the European Central Bank (ECB) Governing Council and President of Deutsche Bundesbank, outlined the formidable financial challenges facing the European Union in its quest to become greenhouse gas-neutral. Speaking at the Adam Smith Business School, Nagel underscored the necessity of an annual investment exceeding €1.2 trillion, or nearly 8% of the EU's GDP, to achieve the 2030 climate targets.

Germany's Share in the Investment

Nagel further elaborated that Germany alone would need to invest €390 billion each year from 2021 to 2030. He projected that the investment burden would be shared among households, firms, and the public sector, with bank loans likely serving as a critical source of external financing. "The private sector must take on the bulk of these investments," Nagel emphasized, highlighting the pivotal role of private investment in meeting the EU's climate objectives.