Weak Investment in the EU: A Long-Term Cross-Sectoral Phenomenon

Martin Gornig and Alexander Schiersch

DIW Economic Bulletin, 2014, vol. 4, issue 7, 23-30

Abstract: Based on capital stock, in total, over six trillion euros less was invested in the European Union between 1999 and 2007 than in the non-European OECD countries, including the US, Canada, and Japan. In the euro area, investment was more than 7.5 trillion euros less than in non-European OECD countries. In virtually all EU member states, gross fixed assets (capital stock) are older than the OECD average and also demonstrate slower growth. This is particularly true for industry, which is expected to play a key role in Europe’s recovery. In order to achieve a higher growth rate, Europe must tackle this lack of investment across the board. Just implement investment programs in individual countries, such as the southern European crisis countries is not enough. In order to launch a broad investment offensive across the EU as a whole, specific steps must be taken. With a view to tackling the lack of investment in the long term, measures include an efficient competition policy and investmentfriendly tax policy.

Keywords: investment; capital stock; sectors (search for similar items in EconPapers)
JEL-codes: E22 H54 O16 R53 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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