# Europe Should Keep Financing Long-Term Projects Amid Uncertainty

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/31149
Published: 2026-10-13T13:05:59.000Z
Updated: 2026-10-13T13:05:59.000Z
Section: Business

> Banco de Portugal Vice-Governor Clara Raposo urged policymakers to test projects against multiple scenarios as uncertainty weighs more heavily on business investment than household consumption.

Europe should continue financing long-term projects despite geopolitical, trade, technology and climate uncertainty, Banco de Portugal Vice-Governor Clara Raposo said, warning that delays could slow infrastructure, productivity and technology adoption.

“Uncertainty should make us more rigorous in the way we select, design and finance investment,” Raposo said in a closing keynote on Oct. 1, 2026. “But it should not become an excuse for delays.”

Raposo urged policymakers and investors to evaluate projects across multiple scenarios rather than postpone commitments indefinitely. She identified climate and energy resilience, defense, strategic capabilities, innovation and efficiency as priority areas.

Uncertainty can increase household savings, raise investor risk premiums and make credit more expensive or less accessible. It can also prompt companies and governments to delay decisions when projects are costly to reverse.

The effect is particularly severe for business investment. In a narrative structural vector autoregression model covering the first quarter of 2001 through the first quarter of 2026, uncertainty shocks reduced euro-area private consumption by 0.4% at the trough and business investment by 1.2%.

The analysis also estimated that uncertainty shocks reduced euro-area real GDP growth by about 0.4 percentage points between the first quarter of 2025 and the first quarter of 2026.

A separate proxy-SVAR model covering the first quarter of 1999 through the first quarter of 2026 produced larger estimates. A one-standard-deviation economic-policy uncertainty shock reduced real GDP by about 1% at the trough, private consumption by approximately 0.7% and business investment by roughly 2%.

The models differ in scale but show the same pattern: business investment is more exposed to uncertainty than household consumption. Tangible investment is also more sensitive than intangible investment, including research and development, software and intellectual property.

The eighth annual Capital Markets Seminar was held in Luxembourg on Sept. 30-Oct. 1, 2026, and drew about 450 investors, financial intermediaries, issuers and policymakers. The European Commission, European Investment Bank and European Stability Mechanism co-hosted the event.

Raposo described postponement as the “option value” of waiting. Firms and governments may delay projects to gather more information, but that choice also postpones infrastructure, productive capacity, technology adoption and knowledge accumulation.