Boosting EU investment capacity: a stronger role for EIB and national promotional banks

Europe’s ambitions on competitiveness, strategic autonomy, the green and digital transitions, defence and resilience require investment on a scale that our currently fragmented capital markets cannot provide. This is why our Opinion calls for a stronger role for the European Investment Bank Group, including the European Investment Fund (EIF), and national promotional banks. They should act as public investors, directing patient capital towards projects that strengthen Europe’s productive capacity and generate lasting economic and social value.

The immediate priority is financial capacity. Funding for the EIB Group under the next EU budget, the Multiannual Financial Framework (MFF), must increase in real terms. Any reduction in EU resources implemented by the Group would contradict Europe’s competitiveness objectives. The EIF and programmes such as TechEU need greater capacity to provide the equity, hybrid capital and venture debt that European start-ups, scale-ups and SMEs often cannot obtain from the market.

More capacity must be matched by a clear mandate. The EIB Group and national promotional banks should form part of an integrated financing ecosystem: closing funding gaps, supporting strategic autonomy and financing European public goods. They cannot replace the completion of the Savings and Investment Union, but they can help overcome the shortage of long-term, risk-bearing capital.

In addition, every intervention should be guided by additionality. Public finance should enable investment that would otherwise not take place or would proceed only on worse terms because of high risk, long maturities, uncertain returns or benefits that markets do not adequately price. Success should not be measured mainly by “private capital mobilised”, but by investment gaps closed, financing conditions improved, productive capacity created and public value delivered.

This also determines the choice of instruments. Direct long-term lending should be reinforced for strategic infrastructure, including energy and grids, clean industry, public transport, water resilience, affordable housing, social and technology infrastructure, and defence capabilities. Equity, hybrid capital and venture debt are vital for innovation and industrial scale-up. Blended finance and guarantees can help but should complement rather than replace direct public investment. Private intermediaries must retain meaningful risk, support must reach final beneficiaries, and the public sector should share fairly in the upside through capped margins, profit-sharing, equity participation or clawbacks.

The same discipline must apply outside the Union. The EIB Group and national promotional bank financing in third countries must align with EU strategic priorities and legislation, ensuring a genuine level playing field. European public finance should not foster infrastructure abroad that competes with EU infrastructure while benefiting from environmental, social, procurement or other requirements less demanding than those imposed within the Union. External investment should reinforce, not undermine, Europe’s productive base, resilience and strategic interests.

To achieve this, better coordination is equally important. The proposed European Competitiveness Fund can move the EU from fragmented governance towards common priorities and implementation frameworks. National promotional banks should participate in its governance and in national and regional partnership plans. Co-investment platforms, harmonised eligibility rules and closer cooperation with the Commission and EIB Group can make existing resources work harder.

Finally, access to finance must become simpler without weakening governance or due diligence. SME instruments should be digital by default and apply the once-only principle, standard templates, self-declarations, real-time application tracking and one SME helpdesk per Member State. Alignment between Horizon Europe and the Competitiveness Fund must not dilute excellence in basic research.

Europe does not merely need more leverage; it needs more effective public investment. A better-capitalised, coordinated and accountable EIB Group and network of national promotional banks can turn EU priorities into productive assets, innovative firms and tangible public benefits, provided that additionality, fair risk-sharing and European strategic interest remain at the heart of every decision.

By Antonio GARCÍA DEL RIEGO, EESC Employers' Group member and President of the Study Group of Opinion ECO/702 Boosting the capacity of the EIB and national promotional banks for innovation, effective industrial policy and economic growth.