Lagarde points to broader Capital Markets Union and venture capital to promote energy transition

green new deal

Banca March| Christine Lagarde has spoken out on independence and investment strategies in the eurozone. On the one hand, she stressed the need to be more self-sufficient in energy, by boosting investment in renewable energies such as green hydrogen and a smart grid system. The leader of the ECB provided numbers that would favour greater progress: 620,000 million euros per year in climate objectives and 125,000 million in the digital transition. To this end, she addressed two essential points on investment: the more integrated Capital Markets Union and the expansion of venture capital. Capital markets are needed to leverage private finance and complement public investment. However, Lagarde pointed out that in the euro area they lack depth and liquidity: “there are many small stock exchanges”.

On the other hand, she stressed the need to boost venture capital, which is relatively small compared to the size of the economy – only one fifth of US venture capital. Thus, measures to promote equity financing can provide opportunities for investment in technologies needed for the transition.

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