Debora Revoltella, Julie Delanote, Tessa Bending, 03 December 2021

The European economic policy response to the COVID-19 pandemic has ensured business continuity and shielded investment, but digital and green transitions are now ever more urgent. This column uses data on 12,000 European firms from the European Investment Bank Investment Survey to show that the pandemic spurred many firms to start accelerating transformation efforts. Policy should seek to support this momentum amid post-pandemic economic recovery.

Peter Harasztosi, Laurent Maurin, Rozália Pál, Debora Revoltella, Wouter van der Wielen, 18 November 2021

Massive policy support sheltered many European firms from the unprecedented Covid shock. However, a debate has emerged regarding the potential side effects of continued support for long-term growth hampering the creative destruction process. This column uses data from the EIB Investment Survey to analyse the impact of policy support in detail. It shows that support went primarily to the most affected firms and does not find evidence of misallocation to zombie firms. In addition, policy support enhanced firms’ capacity to rebound from the crisis, enabling recapitalisation and promoting investment in digitalisation. 

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