Source: Authors’ calculations based on PCT data from PATSTAT (Worldwide PATent STATistical Database) and ECOOM (the Centre for Research and Development Monitoring) in Belgium

Read the full chapter: Innovating for climate change: The green and digital twin transition

Investing in the climate transition

In 2019, EU investment in climate change mitigation increased gradually. In the EU-27, this investment grew 2.7% from a year earlier to EUR 175 billion. EU investment in climate change mitigation is well behind that of China, but ahead of the United States – although the contexts are very different. China invested 2.7% of gross domestic product (GDP) in climate change projects, ahead of 1.3% in the European Union and 0.8% in the United States. However, the European Union has already gone much further in reducing emissions per unit of GDP. It has already picked much of the low-hanging fruit, and its efforts will increasingly have to focus on harder-to-reduce emissions.

However, according to the European Commission, the gap between the European Union’s climate objectives and actual climate investment is growing. Investments in the continent’s energy system would need to rise from an average of 1.3% of GDP per year over the last decade to 2.8% of GDP over the next decade if the European Union is to meet its goal of cutting greenhouse gas emissions by 55% by 2030. Adding investments in transport brings the total over the next decade up to 3.7% of GDP per year. EU investment in climate change mitigation is thus still insufficient.

Read the full chapters:

Chapter: Tackling climate change: Investment trends and policy challenges

Chapter: Climate change risk: Firms’ perceptions and responses

Chapter: Leveraging the financial system to green the European economy

Investing in the digital transformation

The adoption of digital technologies by EU firms is growing, but the gap with the United States has not yet been closed. By 2020, 37% of EU firms had not adopted any new digital technologies, compared to 27% in the United States. Encouragingly, the proportion of digital firms in the European Union grew by nearly 5 percentage points over the 2019 level, albeit the United States saw a comparable increase. The gap with the United States is particularly wide in the construction and service sectors, and in the adoption of technologies associated with the internet of things.

Read the full chapter: Intangible investment, innovation and digitalisation

How has COVID-19 changed the economic landscape?

EU firms may have to reduce investment by at least 25% because of the pandemic. To repair balance sheets, firms will have to cut investment. The EIB Investment Report estimates that the crisis might lead to cumulative firms’ net revenues declining by as much as 13% of EU GDP. To absorb such loss, firms will have to cut investment and increase external finance, which is mostly available only in the form of debt. A trade-off between leverage and investment might thus emerge. Our latest EU-wide survey of firms shows that 45% of businesses expect to cut investment in the coming year, while only 6% expect to increase it.

Moreover, uncertainty about the future grew to become a major deterrent to investment. Uncertainty indicators spiked at the beginning of the pandemic. Although the European Union’s determined economic policy response succeeded in calming short-term fears, a high degree of uncertainty about the future course of the pandemic and the resulting economic crisis remains. 81% of EU firms cite uncertainty as the most serious barrier to investment.

Read the full chapters:

Chapter: The macroeconomic environment

Chapter: Gross fixed capital formation

Chapter: Financing corporate investment

Background information

About the Report

The EIB annual report on Investment and Investment Finance is a product of the EIB Economics Department, providing a comprehensive overview of developments and drivers of investment and its financing in the European Union. It combines an analysis and understanding of key market trends and developments with a more in-depth thematic focus, which this year is devoted to European progress towards a smart and green future in a post-COVID-19 world. The report draws extensively on the results of the annual EIB Investment Survey (EIBIS) and the EIB Municipality Survey.

It complements internal EIB analysis with contributions from leading experts in the field.

About the Economics Department of the EIB

The mission of the EIB Economics Department is to provide economic analyses and studies to support the Bank in its operations and in the definition of its positioning, strategy and policy. The Department, a team of 40 economists, is headed by Debora Revoltella, EIB Chief Economist. Find out more about the EIB’s research here.

Anna Naghdalyan, Spokesperson of the Foreign Ministry of Armenia, on Friday responded to the question of Armenpess.

Question: Yesterday, the European Parliament adopted the annual report-resolutions on the “Common Foreign and Security Policy (CFSP)” and the “Common Security and Defense Policy (CSDP),” which also include provisions on the Nagorno-Karabakh conflict and Turkey’s role. How do you assess them?

Answer: There are a number of important provisions enshrined in the report-resolutions adopted by the European Parliament, which are related to the Azerbaijani aggression against Artsakh [(Nagorno-Karabakh)] and Turkey’s involvement in it, the committed war crimes, as well as the steps to be undertaken to eliminate the consequences of the aggression, especially to address humanitarian issues.

We particularly emphasize that the European Parliament not only condemned the war crimes, including the targeting of civilian population and infrastructure, places of worship, but also stressed that these crimes should not remain unpunished.

We agree with the European Parliament’s call for Turkey to refrain from any intervention in the Nagorno-Karabakh conflict, including offering military support to Azerbaijan, and to desist from its destabilizing actions. In this context, it is especially important that the European Parliament has also condemned the fact that Turkey transferred foreign terrorist fighters from Syria and elsewhere to the Nagorno-Karabakh conflict zone.

I would like to especially emphasize the position of the European Parliament on humanitarian issues, particularly regarding the immediate repatriation of prisoners of war. It should be noted that the issues of security of the people of Artsakh, protection of historical-cultural and religious heritage were properly highlighted in the resolution. It is crucial that the European Parliament expressed its position of providing unhindered humanitarian assistance to Artsakh.

We emphasize the importance of the efforts of international community, in the form of such resolutions, to contribute to the elimination of the causes and consequences of the war, which in accordance to the resolution, supposes the lasting settlement of the Nagorno-Karabakh conflict within the framework of the OSCE Minsk Group Co-Chairs and the determination of the future legal status of Artsakh on the basis of the Basic Principles proposed by the Co-Chairs. As it was once again emphasized by this respective international body, right of the people of Artsakh to self-determination and security is at the basis of the Nagorno-Karabakh conflict.

* Photo: Anadolu Agency (AA) – Archive

Click to read the article in Turkish / Kurdish

Following yesterday’s debate (January 21), the European Parliament resolution on the human rights situation in Turkey, in particular the case of Selahattin Demirtaş and other prisoners of conscience, was voted by the Members of the European Parliament (MEP). The resolution has been approved by 590 votes in favour, 16 against and 75 abstentions.

Referring to former Co-Chair of the Peoples’ Democratic Party (HDP) Selahattin Demirtaş, the MEPs have called for “the immediate and unconditional release of Turkish opposition politician, former MP and former presidential candidate Demirtaş, who has been detained for more than four years by Turkish authorities on unsubstantiated charges and in spite of two European Court of Human Rights rulings in favour of his release.”

CLICK – ECtHR Grand Chamber: Release Demirtaş immediately

CLICK – Court refuses to release Demirtaş despite ECtHR ruling

The MEPs have also demanded that all politically motivated charges against him and fellow members of the opposition HDP party be dropped.

They have also called on the Committee of Ministers of the Council of Europe (CoE) to “urgently review, in its next meeting on March 21, 2021, Turkey’s refusal to execute the judgment of the Grand Chamber of the ECtHR in the case of Demirtaş v Turkey, to adopt a declaration on the matter, and to take the necessary steps to ensure that the Government of Turkey implements this judgment without any further delay.”

‘Put an end to judicial harassment’

The resolution of the MEPs has further stated that “Turkey’s sustained backsliding on the independence of the judiciary and the disregard shown by the Turkish judiciary and authorities for rulings by the European Court of Human Rights are of great concern.”

The resolution of the parliament has called on the authorities in Turkey to “put an end to its judicial harassment of human rights defenders, academics, journalists, spiritual leaders, lawyers and members of the lesbian, gay, bisexual, transgender and intersex communities.”

MEPs have stressed that “respecting and applying the rulings of the ECtHR would go some way to confirming that the desire to turn a new page in EU-Turkey relations,” expressed by President and ruling Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan and other top government officials on 9 January of this year, is “sincere.”

Improved EU-Turkey relations are fully dependent on, among other things, tangible improvements in respect for democratic principles, the rule of law and fundamental rights within Turkey, they have said. (EKN/SD)

* Click here to read the full resolution

The EU has a large fleet that fishes outside European waters. Nearly a third of its catch comes from non-EU waters, most of which belong to developing countries. Where and how much the EU’s “external fleet” can fish is set out in a number of agreements between member states and partner countries, and while these agreements are built on the idea of fairness and sustainability, in our new study we found that this is difficult to truly assess because of a lack of transparency.

UN law recognises the rights of coastal nations to control fish harvests within their national waters, a 200 nautical-mile limit from their coastline. These “exclusive economic zones” cover around 35% of the ocean, bringing about 90% of global fisheries under the control of coastal states. Since 1982, the only way a foreign nation can legally fish in the waters of a coastal nation is through specific fishery agreements between both parties.

The EU’s external fishing activities are also governed by the Common Fisheries Policy, structured around bilateral agreements known as sustainable fisheries partnership agreements – which countries use to give access to EU vessels – and multilateral agreements that control fishing on the high seas.

Alongside ensuring access to global fishing zones and resources, the aims of the Common Fisheries Policy include: contributing to the sustainable development of world fisheries; tackling destructive fishing practices; improving research and data; combating illegal, unregulated and unreported fishing; and strengthening control and inspections.

This story is part of Oceans 21

Our series on the global ocean opened with five in depth profiles. Look out for new articles on the state of our oceans in the lead up to the UN’s next climate conference, COP26. The series is brought to you by The Conversation’s international network.

To do this, the EU provides financial contributions and technical support to partner countries. The EU now regulates numerous such agreements with countries in east and west Africa, the Caribbean, the Pacific and the North Atlantic. In 2009, 14 non-EU countries were collectively paid nearly €150 million (Pound 133 million), making the EU’s financial contributions substantial – and often the main source of revenue for the fisheries ministries of these countries.

And by keeping fishing within the resource limits of partner countries, involving all stakeholders, and contributing to the social and economic development of often less-developed partner countries, these agreements – in theory – are a major step in ensuring the sustainability of the EU’s fishing activities.

The flipside

Agreements have the potential to contribute to food security, economic growth and environmental and social resilience in partner countries. However, insufficient, inaccurate and non-public data makes it difficult to properly evaluate these contributions.

For example, partner countries may not be able to fish far offshore from a lack of local vessels that can reach distant fishing grounds. Although EU states paying for access to these otherwise inaccessible waters would appear to make good sense, it isn’t always fair and sustainable.

Read more: EU targets fragile West African fish stocks, despite protection laws

Take Senegal. Under EU fisheries agreements, the amount of fish caught between 1994 and 2005 fell from 95,000 to 45,000 tonnes due to the overexploitation of stocks. Locally-owned vessels also dropped by 48% between 1998 and 2008.

The EU’s agreement with Senegal was cancelled in 2006 after Senegal demanded additional compensation. But in 2014, another agreement (for tuna and hake) was concluded worth US$1.9 million (Pound 1.4 million) annually, to be renewed every five years, with US$1 million earmarked to promote the sustainable management of Senegal’s fisheries.

Improved access to knowledge, markets, services and opportunities is also a potential benefit for partner countries. But although fish caught in other nations’s waters should be fished according to EU law, there have been numerous cases of illegal, unreported and unregulated fishing by EU vessels in non-EU waters.

Building in sustainable goals

Our new paper, published in Fish and Fisheries, is an attempt to evaluate the true sustainability of the EU’s external fleet by comparing it with the UN’s Sustainable Development Goals (SDGs), which include aims to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

While fishing and fisheries most directly relate to SDG 14, to “conserve and sustainably use the oceans”, we found many more goals where the EU external fleet implicitly interacts. Creating jobs from investments in production and helping to reduce poverty in partner countries, for example, aligns the goal to eliminate poverty (SDG 1), and the goal to provide decent work and economic growth (SGD 8). Other areas that relate to SDGs include health and safety regulations and social security (SDG 3) and the employment of millions of women in the fishing sector (SDG 5), though many are found in the informal economy or in marginalised roles in the supply chain

Improving the data

Our thinking was that EU fishing policy should explicitly engage with sustainable goals other than SDG 14, especially if the EU is to honour its commitment to achieving sustainability across the board by 2030. And we hoped that our research would help to better understand the relationship between EU policy and wider sustainable goals.

But what we discovered was a lack of open-access data and transparency from EU members states and partner countries, reducing their accountability and making it difficult to properly evaluate the true economic, social and environmental sustainability of these fishing activities.

Vessel operators and partner countries must better report data on catch, bycatch, vessel registrations, and labour conditions – and how EU funds are used within partner countries. Clearer, standardised systems for data collection, verification of third parties, and better technologies for monitoring and reporting is also certainly needed. If such improvements are not made, progress towards sustainable, accountable, transparent and fair external fishing practices will remain slow.

Although the external fleet is only a small part of the EU’s drive towards sustainability, equity and global leadership in fisheries, it has an important role to play in people’s lives and marine ecosystems around the world. Policy should be better integrated with efforts directly targeting SDGs on ocean health, social resilience and economic improvement. If the EU prioritises reporting on how its external fisheries specifically support these outcomes, as well as poverty reduction, gender equality, inclusion and human rights, it will go a long way to making sure that its commercial agreements are not just sustainable in name only.

Authors: Andrew Frederick Johnson – Assistant Professor, School of Energy, Geoscience, Infrastructure and Society, Heriot-Watt University | Ingrid Kelling – Assistant Professor of Seafood Sustainability and Ethics, Heriot-Watt University

… to boost small businesses.
The European Union was the largest donor to …