European Central Bank research highlights EU structural funds as a catalyst that generates €1.10 of private investment per €1 of funding

The European Central Bank published a blog post synthesising recent ECB research on how EU investment programmes, particularly the European Structural and Investment (ESI) funds, can help narrow Europe’s investment gap by mobilising private capital alongside public spending. The post frames the policy challenge as additional investment needs of around EUR 1,200 billion per year between 2025 and 2031 and estimates that, even under optimistic assumptions, available national fiscal space plus existing EU resources would still leave a funding gap of over EUR 100 billion per year. It argues that ESI funds are designed to leverage additional resources via mandatory national co-financing and presents evidence of “crowding in” rather than “crowding out”: an ECB study covering EU regions from 2000 to 2021 finds that over two years each euro of ESI funding generated EUR 1.10 of private investment and EUR 0.10 of business R&D. A separate firm-level study for the 2014–2020 programming period finds that ESI-funded firms increased capital stock by 15% and total factor productivity by 3% over four years, with financially constrained firms showing larger increases in debt and capital. Looking ahead to the EU’s 2028–2034 budget preparations, the post points to ESI funds as a benchmark for designing programmes that crowd in private capital and raise productivity, while noting scope to improve governance, the timely allocation of resources and the promotion of cross-border investment.