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Our channel to Brussels

Europe’s promotional banks are joining forces to overcome the major challenges of our time – a mission best accomplished with direct interactions on a day-to-day basis in the EU’s political and administrative capital. David Denzer-Speck runs the KfW office at the heart of the EU.

David Denzer-Speck
Portrait of a man in a suit

Head of the KfW Liaison Office in Brussels.

KfW Liaison Office to the EU in Brussels

Where do you see the biggest challenges for Europe in the next 5 years?

DENZER-SPECK: We have much more economic growth potential in Europe than we are currently realising. Strengthening European competitiveness and revitalising the EU single market are therefore rightly on the political agenda.

Security will also play a more central role. Not only because of the war in Ukraine. This includes military security and joint defence projects, but also economic resilience, for example in the areas of raw materials and energy, critical infrastructure and more stable supply chains.

In terms of foreign policy, the EU - as part of the West - will have to continue to assert itself alongside the superpowers USA and China. Relations with the rest of the world will become more transaction-based.

For the first time in a decade, the EU also has concrete enlargement ambitions. This relates to Ukraine, Moldova and Georgia as well as the countries of the Western Balkans. This is a great opportunity and challenge that will demand many reforms from the countries concerned, but also from the EU.

The two major topics of the outgoing Commission - digitalisation and climate protection - will of course remain central. All of this will take place in an environment of higher interest rates and less fiscal room for manoeuvre.

What significance will KfW's activities in and with Europe have in the future?

As a promotional bank, KfW is active in the areas of climate action & sustainability, innovation & digitalisation, but also in strengthening economic resilience and mobilising private capital: in Germany, in Europe and worldwide.

We work closely with the EU. Between 2016 and 2023, for example, more than 30,000 start-ups in Germany were financed with EU-supported KfW loans. In development cooperation, numerous KfW projects have benefited from EU funds. Since 2017, more than € 5 billion KfW commitments have received EU supported. This includes, for example, funds for the reconstruction and rehabilitation of transmission lines in Ukraine, projects to promote green hydrogen in Chile and infrastructure projects to connect Tunisia to the EU in terms of energy.

However, KfW also supports EU policy objectives independently. The largest European Venture Capital fund of funds (growth fund) launched by KfW Capital at the end of 2023 has an explicitly European investment mandate and thus makes an important contribution to the capital market development in Germany and Europe. Particularly pleasing: for the first time, we have succeeded in involving predominantly private investors. Through our subsidiary KfW IPEX-Bank, commercial investments in the high single-digit billion range are also made in Europe every year. Examples include the first offshore wind farm in Poland, infrastructure for electric vehicles in Benelux and fibre optic projects in Finland.

KfW also supports the EU with expert assessments and knowledge transfer - for example in raw material financing and in the area of sustainable financing. In addition, KfW colleagues work as seconded national experts in the European Commission.

How have your team's tasks changed over the last five years?

I would like to go into two points in more detail:

1) Closer co-operation with our partners.

Many national development banks are active in similar business areas. The exchange of experience is organised via the European Association of Promotional Banks (ELTI). But it is also about concrete, operational cooperation. Within Europe, KfW finances circular economy projects with its EU partners as part of the Joint Initiative on Circular Economy. This was extended in April of this year. Circular projects totalling 16 billion euros are to be financed by 2025. Together we can simply achieve more.

In development cooperation, the European Commission, member states and the European development banks have therefore also joined forces as part of Team Europe and the Global Gateway Initiative. Europe's role as the largest supporter of our partner countries is being improved with a harmonised approach. On behalf of the German government, KfW contributed 1.6 billion euros to Team Europe and more than 9 billion euros to Global Gateway last year. In addition to the European promotional institutions (EIB and EBRD), cooperation and co-financing with our bilateral partners from Italy, France, Spain and Poland (CDP, AFD, AECID and BGK) is particularly close in this area.

2) A more networked approach: The diversity of challenges in Europe requires the use of very different instruments: To switch to a sustainable and digital economy in the EU, the right incentives must be put in place in the member states. The European capital markets need to be further developed so that growth companies can remain in Europe or relocate here. Our economy also needs strong international financing partners for export and project financing, and our partners around the world are keeping a close eye on what concrete cooperation offers Europe is making.

Through the group structure, KfW - together with KfW Capital, KfW IPEX-Bank and DEG - is optimally positioned to offer complementary and coherent solutions in these different policy areas in Germany and - together with our partners - for Europe and the world.

What do you personally want for Europe?

We are celebrating 75 years of Germany’s Basic Law these days. I think that the development of our country into ‘an equal member of a united Europe’ was an outstanding historical achievement of which we Germans, together with our neighbours, can be justifiably proud. I am therefore very optimistic and look forward to the future.

What I wish for Europe: Securing peace. Create prosperity. Overcome division.

Published on KfW Stories on 4 June 2024