Nadia Calviño, EIB President: Can Europe compete?

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Hello, I'm Peter Magjob, BBC presenter,

and this is the interview from the BBC World Service.

The best conversations coming out of the BBC.

People ship in our world from all over the world.

If you're not a little bit afraid,

then you're not paying attention.

You have never seen a people so united.

Do not make that boat crossing.

Do not make that journey.

Being born in America,

feeling American,

having people treat me like I'm not.

We're more popular than populism.

For this interview, I met Nadia Carvino,

the president of the European Investment Bank,

in Luxembourg.

A former Spanish finance minister,

who now oversees the AU's huge lending arm,

mobilizing billions of euros to finance infrastructure,

technology, and energy projects across Europe

and the developing world.

You're going to hear about how Europe needs to find this place

in a shifting global order.

And why Nadia Carvino believes the continent

is an economic superpower and needs to act like one.

But with wars, energy concerns,

and tariffs rocking the global economy,

Europe's priorities are shifting

with an increasing urgency around defence and security.

We're the European Investment Bank,

so we put the money where Europe's priorities are right now.

This means climate, technology, security and defence

and social infrastructures and the rest.

So I think that all of it is very much

underpinning competitiveness and security.

Many people may think,

oh well, defence is about tanks now.

Defence is also about energy security, isn't it?

It is about resilience to health,

as we learned very, very clearly with the COVID pandemic.

It is about social cohesion and territorial cohesion.

It is about social infrastructures.

That's the European brand.

That's the European way of life.

So we need to act in all these areas

in order to ensure peace,

security, stability on our continent,

but also in our neighbourhood.

And that's what the European Investment Bank has in its DNA.

And that's where we're good at.

Welcome to the interview from the BBC World Service

with Nadia Carvino.

How important is the strong Europe when you look at the

current geopolitical landscape?

Well, we see that the geopolitical context,

the global order is reshaping.

Some say it is actually crumbling down.

I think there is a new global order that will emerge,

but we are in the midst of this transformation.

And we're entering a new phase, as we see.

And in this context, it's more important than ever

that Europe acts as a beacon of democracy,

of human rights, respect,

win-win partnerships where everybody wins,

in order for you to have a success,

you don't need others to lose,

which seems to be the approach of some others,

you know, in these troubling times.

An approach that fosters peace and mutual respect,

I think that this is really important.

And Europe has learned lessons throughout our history.

Unfortunately, that can be very valuable for the world

as we are building this new world order.

You identified four key urgent action plans.

That includes having a deeper European integration,

large-scale investment,

especially in critical infrastructure,

simplification of the EU,

making it more nimble, more agile,

and of course, more partnerships and global alliances.

Can you break that down a little bit?

Well, it is clear that, you know,

sometimes we focus very much on what is happening

on the other side of the Atlantic,

whether there is a tariff that is being imposed

or that there are new technologies

and supply chains around the world are changing.

But actually, Europe is a superpower.

The European Union represents 450 million persons.

Of course, much more when we talk about the UK, Switzerland, and Norway.

And if we think about those sectors that are key for the future,

Europe is a superpower, technology superpower,

whether it's quantum technologies, aerospace,

health, tech, many people may think,

oh, this is very far from me,

but more and more, I think that we're all aware

that these technologies are going to be key in our daily lives.

So, if we build on our strengths

and we have a larger, real integrated,

one market in Europe,

then that is going to create the right scale

for companies to be able to thrive and scale up.

And likewise, when it comes to simplification,

reducing bottlenecks,

reducing friction and fragmentation,

and large scale investments.

And that's where the European Investment Bank comes in.

Of course, it's a great success story of the European Union

with capital injection by the member states.

Now, 27, originally 28,

have been able to mobilize trillions of investment

that finance the super infrastructures

that we have from highways to airports,

also research centers, universities,

and hospitals and frameworks

that can build networks and partnerships around the world.

What are your key priority areas for investment right now?

I mean, there's a lot that the AIB is doing

across the region, but also implicit like Africa and Latin America,

but in terms of your priority,

what would you say is the Niggling one right now?

I mean, there's a lot that the AIB is doing

across the region, but also in places like Africa and Latin America?

But in terms of your priority,

what would you say is the the Niggling one right now?

Well, 90% of our finances, as you rightly say, finances projects inside the EU, 10% around

the world. But our priorities are similar in all areas. And our shareholders have unanimously

supported them last in 2024. So we're keeping the course in being the climate bank,

making the green transition, the clean transition of European success that leads to lower energy

prices, cleaner, more sustainable energy. And as we are seeing these days in the Middle East

with the escalation of the conflict, we need to accelerate our energy autonomy in Europe.

That's very clear. Second priority, technological leadership, supporting high-risk,

innovative technologies, whether it is in clean tech or spaces, I mentioned.

That ensures that Europe continues to be a technology powerhouse. And third priority,

security and defence, because it is very clear we need to step up our support and our strength

in the area of security and defence. We're also very active in agriculture and bio-economy,

of course we support territorial cohesion, but probably these three areas are our top priorities

right now. I noticed that with your funding for defence, it's quadrupled in the last year,

and you've broken it down into five key areas, investing in infrastructure, homegrown capacity,

i.e. drones, etc., research, SMEs within the supply chain, and of course new venture capital

within the EU focused on security and defence. Could you elaborate on the decisions behind

quadrupling the budget, but also how you intend to go down the ecosystem?

Yes, when I took the helm of the European Investment Bank in January 2024,

the war in Ukraine had been going on for almost two years, and it was clear to me that we needed to

step up our support in this area, which was virtually non-existent at that time. And it is

impressive how in a matter of a couple of years we've been able to build a very robust pipeline,

we've been able to finance last year, around four billion euros, reaching five percent of our

finance inside the EU, and these five areas are determined by the pipeline of projects we have.

And those areas where the European Investment Bank is uniquely placed, there is no other

institution in Europe and in public or private, that operates in all the 27 member states in all

the regions and can provide really large scale long-term finance, loans that may run up to 30 years

in good financial conditions, so as to finance, military mobility, infrastructure,

military compasses, but also high-risk research programmes,

scale-up also venture capital investments, acting as an anchor investor that brings in private

capital to support the ecosystem of startups and scale-ups in Europe. And what I see is great

potential. I have myself visited a number of companies that show that this technological

leadership is there, and what we need is to reach scale and speed.

Are you or is the AI beyond that some pressure to be the financier of the fence within Europe?

Where the European Investment Bank, so we put the money where Europe's priorities are.

Right now, these means climate, technology, security and defence, and social infrastructures

and the rest, so I think that all of it is very much underpinning competitiveness and security.

Many people may think, oh well, defence is about tanks, now defence is also about energy,

security, isn't it? Absolutely. It is about resilience to health as we learned very, very

clearly with the COVID pandemic. It is about social cohesion and territorial cohesion.

It is about social infrastructures. That's the European brand, that's the European way of life.

So we need to act in all these areas in order to ensure peace, security, stability

on our continent, but also in our neighbourhood. And that's what the European Investment Bank has

in its DNA and that's where we're good at. Some reports have shown that over 60% of EU companies

complain about a fragmentation within the market when it comes to exporting.

You know, some estimates from the International Monetary Fund consider that the fragmentation

existing in our internal market is actually comparable to a 45% tariff when it comes to goods.

And even 110% tariff when it comes to services, you know, I see this as a huge opportunity.

I'm wondering, this strength that Europe has is almost like a reminder to the rest of the world

to say Europe has always been a superpower, but we was happening now in the geopolitical system.

It was an opportunity for Europe to remind the world that we are here and we are the stable

partner that you can rely on regardless of what's happening around the world.

Yeah, absolutely. You nailed it because many times with these doom and gloom around us and as we see

war and death and blood around us and conflicts, it is sometimes overwhelming.

And citizens feel insecure and they wonder, you know, and obviously the European Union is a project

of peace. So we cannot be a defense and a military superpower when we have been building a project

of peace on the ashes of the wars that have permeated the European history. So it sometimes

we need to remind ourselves. And I think the investment report, although it may be very far away,

is a very good illustration because we build this report on the basis of the analysis of 13,000

companies in the EU and in the US. And these years report confirms what we already saw last

year, which is that European companies are weathering the storm quite well. European companies

are showing remarkable resilience. They have been withholding the tariff shock better than

US companies because they have redirected the trade. They have benefited from the 76 investment

in trade agreements that the EU has signed around the world. They have built new partnerships

and new supply chains. And so that has allowed them to be quite resilient to the tariff shock,

likewise to the energy shock. What we see that the European companies have continued to grow,

to invest, to trade. And they are committed to the green transition and the integration of

new technologies in their productive systems. And when it comes to advanced manufacturing,

industrial robotics, aerospace, quantum, health tech, these are areas where European companies

are second to none. So we have to also have a bit more of self-esteem and believe more in ourselves

because when we act and that has been proven time and again, we can be having a very strong

influence in the rest of the world, a force for good in these troubling times.

You are listening to the interview from the BBC World Service.

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professionals, use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals,

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ad buys. You can target your buyers by job title, industry, company, role,

seniority, skills, company revenue. So you can stop wasting budget on the wrong audience.

It's why LinkedIn ads generates the highest B2B return on ad spend of major ad networks.

Spend $250 on your first campaign on LinkedIn ads and get $250 credit for the next one.

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conditions apply. This is Byrd Winthrop, founder of American Giant. We make all our clothing right

here in the US with American cotton and American workers. Get 20% off your first order when you use

code giant20 at American-giant.com. My conversation with Nadia Carvino was not confirmed

until the last minute, following weeks of negotiation with her press team.

In fact, it wasn't until her videographer appeared to film her arrival that I knew the interview

was on. In person, she had undeniable presence, flanked by media staff, and a stern looking

minder. As we spoke, I was struck by her enthusiasm and a close grasp on the detail of the work

she's leading for the EIB. Okay, let's return to my conversation with Nadia Carvino.

Let's talk about the EU single market. This is a 19 trillion economy, the European Union.

Is the market underutilized? Are there enough commercial activities to attract the kind of

investment that you're clamoring for? You're absolutely right that when it comes to the size of

our market, it is comparable to the US in comparable terms when we take into account the currencies

and the prices, and it is in nominal terms also comparable to China. So Europe is a superpower,

and it is perceived to be a superpower by the rest of the world. Sometimes others see what we can't.

So what we need is to build on this single market, on this one market, remove the inefficiencies,

simplify processes, and allow companies to scale up. That is probably the one area where we do

have a serious gap, because we have a vibrant ecosystem of startups, which is comparable to the

American one, but we are in a way the incubator of the world. They grow, they start to grow, and we

support them, and they're doing great, but when they need to really become adults, when they need

to have 500 million euros or even more in their capital, then they have to go to the other side

of the Atlantic, because even though Europe has large savings, there are no suitable investors,

venture investors that are ready to take the risk and put up a large amount, a large ticket.

And that is the gap that we need to fill. When we do that, then European companies will be able

to grow and thrive here in Europe. How do you think we can find these investors? These risk tolerant

investors, the ones possibly willing to take losses, but committed to the long term,

what steps do you think needs to be taken to be able to find these investors?

There is no magic wand to mobilize these investors. Only this morning I had a meeting with

some of the largest European foundations, non-profit institutions that are extremely

interested to support us, but they are also subject to regulations, to rules, to restrictions,

as to how much venture capital they can have in their portfolio. For example,

there are tax divergences between the different countries, there are different rules and regulations,

there are hindrances and disincentives for these institutions to take risk. And here's where the

European Investment Bank Group can help, because our institution is a catalyzer of private

investment. Last year, we represented around 30% of venture debt in Europe, a 25% of

venture capital in the European Union. And that gives us a very good role to catalyze this

private investor. See how we can do risk investments, how we can accompany them,

co-invest with insurance companies, pension funds, but we also need regulatory changes in parallel

so that they are able to take this additional risk. And we can mobilize those deep pockets,

those trillions that are invested or lying in just credit accounts and current accounts in

the banks or in other non- not-so-productive investment instruments.

Although the AIB primarily looks after the region in terms of investment, but also there's a lot

of commitment outside of the region. Now, you've signed a couple of deals already this week,

a couple of agreements, one unique one, a pioneering arrangement with the World Trade Organization,

which is supposed to help remove barriers to trade and investment and give partner countries

an opportunity and access to European businesses. Can you expanse a little bit, Madam President,

about how important these agreements is with the WTL?

Yes, we have signed in the course of this week two very important agreements, one with the World

Trade Organization and the head Dr. Angosi. She is very committed to mobilizing investment,

in particular in Africa, and trying to foster those reforms that can facilitate trade and

investment in this region. And, you know, it's an example of a win-win partnership because

African countries need investment and European companies, of course, are interested to invest in

these countries. So we will be providing technical assistance, we will be analyzing

what measures, how we can, from the European Investment Bank, support those companies that want

to operate first and foremost in Africa and then we'll see in the rest of the world.

Likewise, when it comes to the Gavi, that's the Vaccine Alliance, Dr. Sanyan Ishtar,

the CEO of the Vaccine Alliance, many people maybe don't know, you know, that this institution

exists, which is fantastic, because not only does provide vaccine security around the world

and has grown enormously, of course, since the pandemic, but it also facilitates the building

of vaccine manufacturing capacities, facilities around the world, and in particular in Africa.

So the European Investment Bank is partnering with the Gavi so that we transform pledges,

where finance ministers from around the world are pledging in the coming years,

we're going to contribute X million pounds or euros or dollars to the vaccine alliance.

What we do is we transform those pledges into real money so that the manufacturing facility

can start to be built, you know, because we provide the liquidity, and we have this on top of that,

we also provide financing for vaccine campaigns, also mostly in Africa, but also in other parts of

the world. And that is again a win-win partnership, because as Europeans, we are interested in ensuring

global health. It's one world, it's one health, and also European companies that are very strong

in the pharma industry are also benefiting, you know, that there is this broader market for their

products. So these are areas where the EIB is uniquely placed to join forces with foundations,

with public institutions around the world, and make a difference. We have signed a 1 billion

euro contribution to Mission 300, which is an initiative launched by the World Bank and the

African Development Bank. The head of the African Development Bank was here this week, and we

signed these, we announced this contribution to a mission which is very clear, very, with a very

clear objective. Ensuring the 300 million persons have access to affordable, clean energy in Africa

by 2030. It is a, it is a so important, obviously, it's the basis of development access to energy.

So we will be partnering with these two large institutions so that together we can have a larger

impact to the benefit of our continent, you know, our neighbouring country and our brothers and

sisters on the other side of the Mediterranean, also contributing to more stability, more prosperity,

more robust societies in our neighbourhood. Finally, Madam President, when we talk about energy,

looking back into Europe, possibly maybe the only aspect where the EU is slightly vulnerable,

how urgent is it for Europe to be energy-sovred? There is one lesson coming to us from the

War in Ukraine, and now the escalation of the conflict in the Middle East is that it is urgent,

that Europe regains energy autonomy. We are an energy importing continent. We are,

we discovered in 2022 that we were too dependent on fossil fuel producers. This continues to be

an evidence, and so the revolution, the energy revolution which is in full swing in Europe,

you know, the number, the volumes of renewable energy have doubled in a matter of years.

The European Investment Bank is very heavily invested into energy grids, the deployment of

renewables, decarbonisation of heavy industry, also energy efficiency of SMEs, because obviously

the cheapest energy is the one that's not consumed. We are really in the middle of this process of

transition, now we need to press ahead, accelerate this transition so that we can reduce our reliance

our dependence on other regions, and that we can be more autonomous when it comes to energy.

Thank you for listening to the interview. For more compelling conversations,

search for the interview wherever you get your BBC podcast. You'll find episodes where

Ukraine's president Vladimir Zelensky, Jamie Diamond, chief executive of JP Morgan Chase,

plus many others. Until next time, bye for now.

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