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20 Mar 2023

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EIB Reports Romanian Business Concerns Over Climate Change

Posted with permission from ESG Impact Zone.

The European Investment Bank (EIB) unveiled the results of its annual EIB Investment Survey (EIBIS) in Romania today (March 16) at an event organised together with the National Bank of Romania. The survey shows that on average, Romanian firms are emerging from the pandemic in a relatively good shape, and have used the crisis as an opportunity to change.

Romanian firms became more digital, more often developed new products and shortened their supply chains. The EIBIS results indicate that they now use advanced digital technologies as often as in the United States and the European Union.

"The current economic environment in Romania makes public and private investments in renewable energy extremely cost-effective. Policy support in Europe must ensure that such investments do not take too long to implement, in order to maintain competitiveness in the global market," said Debora Revoltella, Director of the EIB's Economics Department. "Using all financing available to Romania, including EU funds from the Recovery and Resilience Facility, InvestEU and 2021-2027 operational programmes, is key. Blending the available EU grant resources with loans, equity, own resources or other forms of financial instruments will be crucial to fostering a greener economy in Romania and to its ability to rely on safe and predictable energy resources. There is also a strong need for firms and public authorities to address the shortage of skills and financing necessary for the green transition."

Yet, vulnerability remains in the wake of new shocks. Romanian firms are more likely to suffer from high energy costs and the tightening of financing conditions. On balance, firms had a negative outlook, especially regarding the economic climate. Access to finance is worrisome. The proportion of Romanian firms that said they are facing financing constraints (15.2%) exceeds the EU average (6.2%) and is the highest on record in the EIB Investment Survey series.

Mugur Isărescu, Governor of the National Bank of Romania, remarked: "I commend EIB's continuous involvement and support in engaging with stakeholders in Romania through these valuable series of events. There is already a tradition, today's conference being the sixth we have co-organized and hosted. Romania and the European Investment Bank share a long and fruitful partnership that has resulted in projects in important sectors of our economy. I am certain we will be able to continue to build on this important partnership, tackling variable challenges and opportunities. In this current juncture, the balanced macroeconomic policy mix and the implementation of structural reforms, including the use of EU funds to foster the growth potential over the long term, are essential in preserving a stable macroeconomic framework and strengthening the capacity of the Romanian economy to withstand adverse developments."

Image from Encyclopedia Britannica.

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