At some point in 2021, investors will need to weigh up the EU’s increasingly successful, swift transition towards green energy, against mounting political woes facing the Eurozone.
The ‘landmark’ court ruling against the French government on Wednesday – convicted of failing to address the climate crisis – has been hailed as a historic win for climate campaigners.
Spain’s recent renewable energy auctions, which attracted record low bids, underline the rapid cost reductions.
Europe’s green energy majors are in a prime position to benefit from this secular shift in renewable energy.
At the same time, large investments in clean energy will generate a deflationary impulse, a double-edged sword perhaps for highly indebted governments and corporates. Political risks are emerging.
A ‘botched’ vaccination programme, high levels of unemployment (especially for the under-25s), economic conditionalities, and an increase in nationalist sentiment are rising risks for Europe in 2021/22.