The EIB Investment Survey for 2024 provides some interesting differences between the US and EU. I highlight some of the survey results that caught my eye for trying to explain the difference in the economic and financial environment between the two. First, there is higher level of uncertainty in the EU associated with the Ukraine-Russia War. Second, the cost of energy is a major obstacle in the EU unlike the US. Third, the availability of finance is a much greater concern in the EU.
What is surprising is the fragmentation of requirements and standards in the EU. It is not really a single market in the same way as the US. This generates a significant amount of costs for any business that is trying to grow and innovate in the EU.
The amount of time and effort to meet regulatory requirements in some EU countries is staggering. While the number does not seem out of line for the EU versus the US, the variation is surprisingly high.
The regulatory burden for small firms is especially high. These are the firms that are expected to be innovators and drivers of future growth. It is likely that small firms in the US have to spend more time and effort on regulatory issues relative to large firms, yet there is not the problem of dealing with intra-EU regulatory problems.
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