Question1: is euro area investment too low? Let’s start with the first question: Is euro area investment too low? Looking at Figure 1, we see the development of real investment and its components in the euro area. The yellow line represents the level of real total investment. As you can see, total investment started to recover in early 2013.
This was after a period of substantial contraction during the financial crisis and its aftermath. However, it has not yet recovered to pre-crisis levels, despite the unprecedentedly favorable financing conditions.