European banks raise investment needs to 7% of GDP

The European Banking Federation has significantly increased its estimate for Europe’s annual investment requirements, raising the figure to 7% of GDP, or approximately 1.4 trillion euros per year. This is a substantial increase from the 800 billion euros previously projected in the Draghi report.

To meet these needs, European banks are calling for a revision of capital requirements, simplified regulations, and the liberalization of financing through securitization and capital markets. The report, prepared with assistance from Oliver Wyman, suggests that the current financing model is insufficient to cover these costs, which stem from increased defense needs due to geopolitical risks, as well as social and environmental priorities.

In Greece, a separate trend shows a widening gap in deposit interest rates. According to Bank of Greece data, banks are offering 2.16% on new fixed-term deposits for businesses with maturities of up to one year, compared to 1.28% for households. Banking officials attribute this disparity to the strong negotiating power of large corporations and the complex, multi-faceted commercial relationships they maintain with banks, including loans, leasing, and payroll services.