Investment Report 2022/2023: Resilience and renewal in Europe

About the Economics Department of the EIB The mission of the EIB Economics Department is to provide economic analyses and studies to support the Bank in its operations and to help define its positioning, strategy and policy. [...] a major deterioration in the european Union’s terms of trade (the ratio of export and import prices) and the widening in interest rates between europe and the United States caused the euro to depreciate. [...] the first box draws on the latest eIB Investment Survey (eIBIS) to analyse the reaction of european firms to trade disruptions caused by the pandemic and the Ukraine war. [...] By paying more for imported oil and gas than before the war, the european Union effectively transferred wealth worth about 3.5% of its GDp to oil and gas producers (15% of which went to russia).2 The trade deficit and growing differences between interest rates in the euro area and the United States weakened the euro. [...] the impact of the war and the energy shock on inflation in different eU countries depends on certain characteristics, the two most relevant being geographical proximity to Ukraine and the existence of a national currency.