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What Europe’s economy needs now

By Werner Hoyer

27 Feb 2023 · 3 min read

Editor's Note

President of the European Investment Bank, Werner Hoyer, stresses that Europe should take note of the US Inflation Reduction Act and demand smart, targeted investments from our policymakers.

LUXEMBOURG – Faced with growing investment gaps, most European policymakers seem to think it is time for another broad-based stimulus package, despite high inflation and high levels of public debt. But I am afraid they are wrong.

Stimulus would simply force the European Central Bank to increase interest rates further and faster. What we need instead is targeted support, namely investments in sectors that are green and likely to promote resilience and competitiveness. The necessary resources must be mobilized quickly and on an EU-wide scale, with the express goal of mobilizing private investment.

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