ECB’s Elderson: Not Enough Financing for a Green Transition

10 May 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – European Central Bank Executive Board member Frank Elderson on Friday said that the flow of finance remains insufficient for a timely and orderly green transition.

Speaking at a panel discussion in Rome, Elderson said, ‘In spite of the important progress made by European executive and legislative branches, in terms of new legislation, new regulation policies, the flow of finance continues to fall short relative to what is necessary to deliver a timely and orderly transition’.

According to Elderson, capital markets were not doing enough to support the transition to a green economy, as they could encourage yet greater investments in green technologies.

‘However, those markets are still relatively underdeveloped in the EU and cross border flows are limited by a lack of harmonisation. Resolving these issues will make the flow of financing Europe more efficient, and at the same time, more resilient’, he said.

In financing the green transition, the public sector also should play a large role through public investments, private public partnerships, and state guarantees, Elderson said, adding that a lot of it would be financed through the Next Generation EU programme.

‘[H]ow much this EU finance expenditure will contribute to the EU's climate objectives is uncertain and depends on how quickly and how successfully the individual countries implement their recovery and resilience plans’, he said.