An Investment Agenda for Europe

Ferdinand Fichtner, Marcel Fratzscher and Martin Gornig

DIW Economic Bulletin, 2014, vol. 4, issue 7, 3-6

Abstract: Only strong economic growth will help Europe emerge from its crisis. The reforms implemented to date at national and European level have failed to impact the economypositively; this is due to excessive national, corporate, and private debts, the flawed banking system, the lack of structural reforms, an insufficient institutional framework at European level, as well as a persisting climate of distrust in the stability of economic development. The probability of economic stagnation, which is marked by high unemployment, declining incomes, decelerating potential growth, and deflation, is high and has increased significantly. The risk of economic development in Europe following Japan’s example of the 1990s is very real indeed. This Economic Bulletin shows that one of Europe’s biggest economic weaknesses is a lack of private investment and that a European investment agenda is vital in order to generate the impetus required to push the European economy towards a sustainable recovery. European economic policy should focus not on higher public spending, but on increasing private investment as well as creating markets that function properly.

Keywords: investment; potential growth; construction (search for similar items in EconPapers)
JEL-codes: E22 E27 F21 (search for similar items in EconPapers)
Date: 2014
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