Name: European firms have adjusted to the tariff shock | DW News
Uploaded: 2026-01-23T17:36:38.000Z
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European companies have adjusted quite well to the tariff shock, actually better than US companies.

Large investments, large infrastructures, research, new technologies, cybersecurity, nurturing the venture capital ecosystem.

It's very important that Ukraine continues with these reforms that will bring it closer to the eu.

Nadia Calvino, the European Investment Bank President, thank you very much for joining me.

The global economy is at a sensitive point right now.

Not just the tariffs over Greenland, at least the threat of them, but

unrest in Iran and there's still no end in sight to the war in Ukraine.

All that translates into tighter fiscal space, credit risk, rates, risk as well.

Is this the right time for Europe to be taking on more economic risk?

Well, I don't think that we're taking more economic risk.

By ensuring that we grow, that we are reinforce and step up our security and defence capabilities, that we support Ukraine, that is actually preserving our security, our peace and economic prosperity going forward.

And if we are united, we are unstoppable.

We've gone through crisis throughout history and we have always succeeded.

When we kept our unity, we were determined and we acted on the basis of solidarity.

I think this is the right approach and I hope that, that that will continue to be our approach also in the European Council this Thursday.

But it sounds like what you're saying is that it's worth it to borrow in these uncertain times in order to invest in the types of projects that you've talked about, that you will talk about.

And do you need fresh guarantees in order to be able to carry out your work in these uncertain times?

Well, no, in the current situation, the European Investment bank is in a very solid position.

We have a very strong 45% core tier one capital.

We have, as I said a moment ago, a triple A.

We see financial markets that are actually looking to buy our bonds.

We have a very strong standing in financial markets.

We have a very strong portfolio and very strong also risk management mechanisms.

So actually we're one of the few multilateral institutions that right now can continue to play an important and role in the world without calling on our shareholders to increase our capital.

And that puts us in a quite unique position.

That and having the 27 European member states as our shareholders, neither more nor less.

Okay, and you're lifting defence related spending to 4.5 billion.

What exactly counts as defence in your book and what's still off limits?

For the past two years, there's been a sea Change in terms, a step change really in terms of the I activities of the European Investment Bank Group in the area of security and defence.

We extended the scope of projects that can be financed so that we are actually doing pure military projects.

And we also removed the absolute caps that existed in the past so that every year we can determine what are our financing targets.

And actually in 2025 I can give you a heads up of the results we will be announcing next week.

So we already Provided More than 4 billion euros in finance for security and defence projects in 2025.

And that's close to 5% of our total financing inside the European Union.

I'm quite confident we will also outperform it.

And we are talking about projects that range from military mobility, key military infrastructures, for example, a military campus in Lithuania that will host a Bundeswehr brigade actually, and

a new campus also in the west of Lithuania, to enhancements of ports throughout the eu.

We're also talking about industrial capacity, for example quantum systems, a drone manufacturing.

In Germany we are financing also support to SMEs in the supply chain.

We have an agreement with Deutsche bank to provide liquidity to small and medium sized enterprises in Europe.

Research and development, very important deals with Thales, with Indra to finance their research programs.

And finally, we're also nurturing the emerging ecosystem of investment, venture capital and investment funds in Europe in the area of security and defence.

So I would say from the European Investment Bank Group, it's clear we're playing our part in supporting Europe's capacity in this very important area.

So that's quite a wide ranging number of ways that you're supporting defence.

But when most people think of defence, they think of weapons and ammunition.

Has the taboo over weapons financing been broken?

Is that something that you can see changing?

Well, you know, we are a multilateral development institution and it's very important to preserve that status.

And it's also important to bear in mind that we are not a defence ministry.

So as I was saying, each one should play its part.

And the European Investment bank is focusing where we can really make a difference and where we're very good at large investments, long term investments, large infrastructures, research, new technologies, cybersecurity, nurturing the venture capital ecosystem.

That is an area where the EIB is very strong and where we are already making a difference for Europe.

Now some of the comments that you see online under TikTok posts or Twitter, they say, why are we spending billions of taxpayer cash on Ukraine when we should be spending on schools and hospitals at home.

Maybe you could explain how the funding actually works and why it's necessary to spend on Ukraine and not, let's say, schools and hospitals at home.

And I fully agree and I am very mindful always to listen to citizens.

You know, schools and hospitals underpin the European way of life.

And so the European Investment bank is a very important player in this area in terms of health, in terms of hospitals, and

Only in 2025 we have provided more than 5 billion euros in housing and our target is 6 billion euros for 26.

So we are there where we can, as I said before, make a difference for citizens, for businesses and for Europe as a whole.

But that should not impede us to see that we also need to support Ukraine.

Ukraine right now plays a key role to preserve our security, our peace, our stability, even our border protection.

And so from this point of view, we need to do both.

And from the European Investment bank group, we are acting and we're the main investment partner to the Ukrainian government when it comes to rebuilding infrastructures, also water supply, hospitals, kindergarten, schools, universities, energy infrastructures, transport infrastructures, also supporting SMEs in Ukraine and European SMEs exporting to Ukraine through our trade, finance, support and guarantees.

Because that is what we need to do now in order to ensure that there is resilience in the country.

And I hope that we focus on the reconstruction and the structure, strong recovery once the war is over.

And you're taking credit, you're not taking taxpayers cash and giving it to Ukraine?

What we use is the European budget guarantees and which are instrumental obviously to be operating in a country in war right now.

And of course we borrow in financial markets around 60 billion euros a year with which we finance our investments.

And I should also add the eib, and maybe your viewers don't know it, we are profitable.

We make more than 2 billion euros in profit every year, which we bring to our reserves to continue to enhance and reinforce our capital and to provide our financial stability.

That's what guarantees that we can provide long term finance in good conditions.

There were concerns last year when President Zelensky seemed on the verge of dismantling, or if you're putting it favorably, at least reforming anti corruption regulators and investigators in Ukraine.

Are you concerned about how your money is being spent there?

We have our own internal investigation processes which are focusing a lot on Ukraine these days.

We have agreements with the anti corruption institutions in the country.

We're helping them to build capacity, but also working day, you know, on a daily basis with them.

We also have very tight cooperation with the World bank, with the UN Development Program, with all those agencies that are on the ground.

And we are operating not only with the government and not only with the private sector, also with the network of mayors of the cities throughout Ukraine that also create a capacity, you know, for managing European investments.

And all in all, what I can say is that it's very good that there was a decision to pull back some of those decisions and to make sure that there is a strong anti corruption governance and architecture in the country.

And actually it's very important that Ukraine continues with these reforms that will bring it closer to the eu, because accession to the EU and the EU enlargement is obviously going to be one of our top priorities once the war is over.

But it requires Ukraine to be up to the European standards when it comes to fighting corruption.

And you're holding a 100 billion euros financing target for 2026.

But at one count, over half of it is still climate funding.

How do you defend that to citizens of Europe who think defense is by far more the much more important immediate priority?

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European firms have adjusted to the tariff shock | DW News

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