„Affordable housing is immensely important, and the more people take care of it, the more can be achieved.“ With these words, Eckhard Forst, President of the Association of German Public Banks (VÖB), emphasises in an interview with Börsen-Zeitung that regional and national development banks should not be the only ones to address the issue.

The recent appointment of an EU Commissioner specifically responsible for housing provoked some critical reaction, and the arrival of Dan Jorgensen from Denmark in the Energy and Housing post has met with a mixed response. But Forst views the appointment positively, even though it will only become clear in the coming months what the European Union intends to do in the area of promoting affordable housing.

„The EU could help with housing construction,“ says Forst, by making EU money available. And it could help the banks involved to access capital on very favourable terms. But EU support must be compatible with national rules. Forst, who is CEO of NRW.Bank, points out that the VÖB has been in dialogue with the European Investment Bank for a long time.

Subsidised housing construction, i.e. for tenants with a certificate of eligibility, already works in Germany. „We are even experiencing a renaissance of subsidised housing in North Rhine-Westphalia,“ reports the association President. Thanks to high repayment discounts and very attractive interest rates, investors could realise projects that would otherwise hardly be economically viable. Meanwhile, as far as middle-income households are concerned, the high construction costs mean that housing developers have to charge rents that are hardly affordable.

Beyond housing construction, Forst is also concerned with the issue of competitiveness. The longer-term development of the stock market shows that Germany's banks and companies are perceived quite favourably. „But what worries me are the shortcomings in the international competitiveness of the German economy", he says.

The demand for credit from companies has recently fallen significantly, and many entrepreneurs are postponing their investment plans. This will not have a major impact in the short term. But companies that do not invest today will lose competitiveness in a few years, he notes.

The postponement of investments – which he hears about from many companies – has to do with the lack of dependability and predictability of the framework conditions. Nobody knows, for example, how energy prices will develop – and that also depends on political decisions. „In a nutshell, for demand for credit to pick up again, the framework conditions have to be right, including the regulatory ones,“ says Forst.

In addition, the burden of reporting obligations on companies must be reduced. Small companies, in particular, are unable to cope with the extensive requirements, especially in connection with sustainability. The reporting obligations remain very difficult for some companies to implement. Forst argues that the number of standards that apply to banks should not increase as dramatically as they have so far, saying that there are too many, and they are too complex.

With regard to one of the EU Commission's central projects, Forst expresses his support: Much of what is being discussed under the title of Capital Markets Union is desirable, he is convinced. „We need Capital Markets Union if we want to mobilise significantly more capital."