Patricia Wruuck, EIB: Municipal investment and cohesion in Europe

At this year’s Foreign Investors Summit, Patricia Wruuck, Economist in the Economics Department of the European Investment Bank, held an insightful presentation titled “Municipal investment and cohesion in Europe: current challenges,” in which she showed why investments at the municipal level are just as important as national ones, as the development of cities can significantly improve citizens’ lives.

An EIB report found that local investments have started to pick up the pace since 2017, with northern Europe recording higher levels than the southern parts of the continent. Before the covid crisis, EU municipalities made more investments in digital and social infrastructures and in climate change mitigation. But, as EIB Economist Patricia Wruuck pointed out, municipalities find that important gaps have remained, notably in terms of urban transport and digital infrastructures, as well as in the area of climate change mitigation and adaptation.

One area worth a closer look is the social infrastructure; about a third of municipalities are recording an investment gap in this area. Social housing, healthcare for children and the elderly, and the education system all need to be addressed in a more comprehensive manner. “Digging a bit deeper, we can see a difference in development among EU municipalities with large income gaps. This can be seen in housing conditions, but also in healthcare,” said Patricia Wruuck. After the pandemic hit, more local investments went towards digitalization and social infrastructure. But municipalities in the lesser developed regions tended to retain a greater focus on basic needs, such as urban infrastructure and utilities.

The European Union’s financial support helps address issues of access to finance, but governmental capacity remains key in making the most of these opportunities. Authorities must address regulatory barriers to investment, including those existing at the local level, in order to unlock economic transformation opportunities.

***

Patricia Wruuck is an Economist in the Economics Department of the European Investment Bank where she is principally responsible for research on skills and cohesion topics. Her research interests are in European policy, regional and human capital development. Previously, she has worked at Deutsche Bank Research and Google. Patricia holds a Master from Freie Universität Berlin and a doctoral degree from Mannheim University.