Member of the European Central Bank (ECB) Governing Council and Deutsche Bundesbank President Joachim Nagel emphasized the significant financial demands of the European Union’s transition to a greenhouse gas-neutral economy in a speech at the Adam Smith Business School on Thursday.
Nagel highlighted that the EU must invest over €1.2 trillion annually, or nearly 8% of its GDP, to meet its 2030 climate targets. In the period from from 2021 to 2030, Germany alone must invest €390 billion per year according to the banker, who also projected that households, firms, and the public sector will share investment burdens, with bank loans probably playing a crucial role in external financing. "The private sector must take on the bulk of these investments," Nagel concluded.
