Firms reported declining interest rates on bank loans, while indicating a slight further tightening of other lending conditions.
The bank loan financing gap remained almost unchanged, with firms reporting a reduced need for such loans alongside a slight decrease in availability.
Firms’ one-year-ahead median inflation expectations decreased slightly to 2.9%, down from 3%, while median inflation expectations three and five years ahead remained unchanged at 3.0%.

In the most recent round of the Survey on the Access to Finance of Enterprises (SAFE), covering the first quarter of 2025, euro area firms reported a net decrease in interest rates on bank loans (a net ‑12%, compared with a net ‑4% in the previous quarter), suggesting that monetary policy easing is being transmitted to firms. At the same time, a net 24% (a net 22% in the previous quarter) observed increases in other financing costs (i.e. charges, fees and commissions) (Chart 1).
In this survey round, firms indicated a reduction in the need for bank loans (net ‑4%, unchanged from the fourth quarter of 2024, Chart 2). At the same time, firms reported broadly stable availability of bank loans (a net ‑1%, down from a net 2% in the previous quarter). This left the bank loan financing gap – an index capturing the difference between the need for and the availability of bank loans – broadly unchanged (a net ‑1%, after a net 1% in the previous survey round). The current composite financing gap indicator – which includes bank loans, credit lines and trade credit as well as debt securities and equity – is reaching levels historically associated with periods of monetary policy easing. Looking ahead, firms expect a modest improvement in the availability of external financing over the next three months.
Firms continued to perceive the general economic outlook to be the main factor hampering the availability of external financing, as in the previous survey round (a net ‑21%, compared with a net ‑22%). A net 7% of firms indicated an improvement in banks’ willingness to lend (down from a net 8% in the previous survey round).
A net 6% of firms reported an increase in turnover over the last three months, unchanged from the previous survey round, with a significantly higher percentage of firms becoming optimistic about developments in the next quarter (a net 30%, up from a net 11%). More firms saw a deterioration in their profits compared with the previous survey round (a net ‑16%, down from ‑14% in the previous survey round). The survey indicates that the net percentage of firms reporting rising cost pressures had also increased over the past three months.
Firms’ expectations of selling prices over the next 12 months were unchanged, while expectations for wage costs slightly decreased, driven by lower expected pressures in the services sector (Chart 3). On average, firms’ selling price expectations remained unchanged at 2.9%, while the corresponding figure for wages was 3.0% (down from 3.3% in the previous round). At the same time, firms signalled a slight increase in other production costs (4%, up from 3.8% in the previous round).
Firms’ inflation expectations for the short term slightly decreased, while remaining unchanged at longer horizons (Chart 4). Median expectations for annual inflation one year ahead declined by 0.1 percentage point to 2.9%, while those for three and five years ahead saw no changes, standing at 3.0%. For inflation five years ahead, fewer firms reported balanced risks (30%, down from 33% in the previous round). A higher percentage of firms is seeing risks to the five-year-ahead inflation as being tilted to the upside (55%, up from 51% in the previous round), which was mirrored by a decline in the proportion of those perceiving risks to the downside (14%, down from 16%).
The report published today presents the main results of the 34thround of the SAFE survey for the euro area. The survey was conducted between 10 February and 21 March 2025. In this survey round, firms were asked about economic and financing developments over two different reference periods. Around half of firms were asked about changes in the period between October 2024 and March 2025. The remainder, all from the 12 largest euro area countries, were asked about changes in the period between January and March 2025. Additionally, firms also reported their expectations for euro area inflation, selling prices, and other costs. Altogether, the sample comprised 11,022 firms in the euro area, of which 10,167 (92%) had fewer than 250 employees.
For media queries, please contact Benoit Deeg tel.: +49 172 1683704.
Notes

The report on this SAFE survey round, together with the questionnaire and methodological information, is available on the ECB’s website.
Detailed data series for the individual euro area countries and aggregate euro area results are available on the ECB Data Portal.

Chart 1
Changes in the terms and conditions of bank financing for euro area firms

(net percentages of respondents)

Base: Firms that had applied for bank loans (including subsidised bank loans), credit lines, or bank or credit card overdrafts. The figures refer to rounds 27 to 34 of the survey (April-September 2022 to October 2024-March 2025).
Notes: Net percentages are the difference between the percentage of firms reporting an increase for a given factor and the percentage reporting a decrease. The data included in the chart refer to Question 10 of the survey. The grey panels represent responses for three-monthly reference periods, whereas the white panels relate to replies for six-monthly reference periods.

Chart 2
Changes in euro area firms’ financing needs and the availability of bank loans

(net percentages of respondents)

Base: Firms for which the instrument in question is relevant (i.e. they have used it or considered using it). Respondents replying “not applicable” or “don’t know” are excluded. The figures refer to rounds 27 to 34 of the survey (April-September 2022 to October 2024-March 2025).
Notes: The financing gap indicator combines both financing needs and the availability of bank loans at firm level. The indicator of the perceived change in the financing gap takes a value of 1 (-1) if the need increases (decreases) and availability decreases (increases). If firms perceive only a one-sided increase (decrease) in the financing gap, the variable is assigned a value of 0.5 (-0.5). A positive value for the indicator points to a widening of the financing gap. Values are multiplied by 100 to obtain weighted net balances in percentages. The data included in the chart refer to Questions 5 and Questions 9 of the survey. The grey panels represent responses for three-monthly reference periods, whereas the white panels relate to six-monthly reference periods.

Chart 3
Expectations for selling prices, wages, input costs and employees one year ahead, by size class

(percentage changes over the next 12 months)

Base: All firms. The figures refer to rounds 29 to 34 (September 2023 to March 2025) of the survey, with firms’ replies collected in the last month of the respective survey waves.
Notes: Average euro area firms’ expectations of changes in selling prices, wages of current employees, non-labour input costs and number of employees for the next 12 months using survey weights. The statistics are computed after trimming the data at the country-specific 1st and 99th percentiles. The data included in the chart refer to Question 34 of the survey.

Chart 4
Firms’ median expectations for euro area inflation by size class

(annual percentages)

Base: All firms. The figures refer to pilot 2 and rounds 30 to 34 (December 2023 to March 2025) of the survey, with firms’ replies collected in the last month of the respective survey waves.
Notes: Median firms’ expectations for euro area inflation in one year, three years and five years, calculated using survey weights. The statistics are computed after trimming the data at the country-specific 1st and 99th percentiles. The data included in the chart refer to Question 31 of the survey.

 
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Blog post by: Salih Fendoglu, Mahvash S. Qureshi, Felix Suntheim | Heightened tensions can hurt stock markets, raise government borrowing costs, and pose risks to financial stability
Global geopolitical risks remain elevated, raising concerns about their potential impact on economic and financial stability.
Shocks such as wars, diplomatic tensions, or terrorism can disrupt cross-border trade and investment. This can hurt asset prices, affect financial institutions, and curtail lending to the private sector, weighing on economic activity and posing a threat to financial stability.
Such risks are challenging for investors to price due to their unique nature, rare occurrence, and uncertain duration and scope. This can lead to sharp market reactions when geopolitical shocks materialize.
As we show in a chapter of the latest Global Financial Stability Report, stock prices tend to decline significantly during major geopolitical risk events, as measured by more frequent news stories mentioning adverse geopolitical developments and associated risks. The average monthly drop is about 1 percentage point across countries, though it’s a much larger 2.5 percentage points in emerging market economies.

Of the different types of major geopolitical risk events, international military conflicts hit emerging market stocks the hardest, likely because of more severe economic disruptions compared with other events. In these cases, the average monthly drop in stock returns is a significant 5 percentage points, twice as much as for all other types of events.
Heightened geopolitical risks may also affect the public sector as economic growth slows and governments spend more. Consequently, sovereign risk premiums—measured by prices for credit derivatives that protect against default—often increase after geopolitical events by, on average, about 30 basis points for advanced economies and 45 basis points for emerging market economies. Such financial strains are especially significant in emerging market economies, where premiums increase up to four times as much.
Cross-border spillovers
Geopolitical risk events can also spill over to other economies through trade and financial linkages, increasing the risk of contagion. Stock valuations decline by an average of about 2.5 percent following the involvement of a main trading partner country in an international military conflict. Likewise, sovereign risk premiums rise when trading partners are involved in geopolitical risk events, and the effect is at least twice as large for emerging market economies with high public debt relative to economic output, low international reserves adequacy, and weak institutions, as the chapter shows.

Heightened uncertainty is a key channel for asset price reactions. Geopolitical shocks tend to raise macroeconomic uncertainty for several months. Investors, however, recognize these risks and demand compensation for holding stocks that may perform worse when hit by a shock.
Eventually, a sudden drop in asset prices may weigh on bank and non-bank financial institutions with potential spillovers to the broader financial system and the real economy. For example, banks tend to curb lending, and investment funds face lower returns and elevated redemption risk when exposed to geopolitical risk events.
Mitigating risks
While it may seem like the global economy and financial markets are regularly upended by unpredictable and even unprecedented events, there is still much that the financial sector and those charged with safeguarding it can do to protect financial stability.
Financial institutions and their regulators should allocate adequate resources to identify, quantify, and manage geopolitical risks. For example, through stress tests and other analyses that incorporate how such risks are likely to interact with financial markets.
In addition, financial institutions should hold enough capital and liquidity to help them endure potential losses from geopolitical risks. Emerging market and developing economies should further develop and deepen financial markets to help investors manage risks. Finally, since countries with weaker buffers are particularly vulnerable to geopolitical shocks, sufficient fiscal policy space and adequate international reserves could help them better defend against such disruptions.
—This blog is based on Chapter 2 of the April 2025 Global Financial Stability Report, “Geopolitical Risks: Implications for Asset Prices and Financial Stability.”
 
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The Cybersecurity Act strengthens the EU Agency for cybersecurity (ENISA) and establishes a cybersecurity certification framework for products and services.

A new mandate for ENISA
ENISA, the EU Agency for cybersecurity, is now stronger. The EU Cybersecurity Act grants a permanent mandate to the agency, and gives it more resources and new tasks.
ENISA will have a key role in setting up and maintaining the European cybersecurity certification framework by preparing the technical ground for specific certification schemes. It will be in charge of informing the public on the certification schemes and the issued certificates through a dedicated website.
ENISA is mandated to increase operational cooperation at EU level, helping EU Member States who wish to request it to handle their cybersecurity incidents, and supporting the coordination of the EU in case of large-scale cross-border cyberattacks and crises.
This task builds on ENISA’s role as secretariat of the national Computer Security Incidents Response Teams (CSIRTs) Network, established by the Directive on security of network and information systems (NIS Directive).
A European cybersecurity certification framework
The EU Cybersecurity Act introduces an EU-wide cybersecurity certification framework for ICT products, services and processes. Companies doing business in the EU will benefit from having to certify their ICT products, processes and services only once and see their certificates recognised across the European Union.
More on the certification framework
Targeted amendment
On 18 April 2023, the Commission proposed a targeted amendment to the EU Cybersecurity Act. This targeted amendment was adopted on 15 January 2025 and aims to enable the future adoption of European certification schemes for ‘managed security services’ covering areas such as incident response, penetration testing, security audits and consultancy. Certification is key to ensure high level of quality and reliability of these highly critical and sensitive cybersecurity services which assist companies and organisations to prevent, detect, respond to or recover from incidents.
On 11 April 2025, the Commission launched a public consultation for input to evaluate and revise the Cybersecurity Act.

 
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Today, EU Member States have voted in favour of the European Commission’s proposal to introduce trade countermeasures against the United States.
The Commission’s proposal was made in response to the March decision by the US to impose tariffs on imports of steel and aluminium from the EU.
The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial.
Today’s vote of approval by Member States means that – once the Commission’s internal procedures are concluded, and the implementing act published – countermeasures will enter into force. Duties will start being collected as of 15 April.
These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome.
For more information, please contact:

Olof Gill, Spokesperson, EUROPEAN COMMISSION
Saul Louis Goulding, Press Officer, EUROPEAN COMMISSION
Marta Perez-Cejuela Romero, Press Officer, EUROPEAN COMMISSION

 
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To become a global leader in artificial intelligence (AI) is the objective of the AI Continent Action Plan launched today. As set out by President von der Leyen at the AI Action Summit in February 2025 in Paris, this ambitious initiative is set to transform Europe’s strong traditional industries and its exceptional talent pool into powerful engines of AI innovation and acceleration.
The race for leadership in AI is far from over. From cutting-edge foundation models to specialised AI applications, the AI landscape in the EU is dynamic. It is driven by research, emerging technologies and a thriving ecosystem of startups and scaleups. The AI Continent Action Plan will boost the European Union’s AI innovation capabilities through actions and policies around five key pillars:

Building a large-scale AI data and computing infrastructure  

The Commission will strengthen Europe’s AI and supercomputing infrastructure with a network of AI Factories. 13 of these factories are already being deployed around Europe’s world-leading supercomputers. They will support EU AI startups, industry and researchers in developing AI models and applications.
As announced in the Competitiveness Compass, the EU will also help set up AI Gigafactories. These will be large-scale facilities equipped with approximately 100,000 state-of-the-art AI chips, four times more than current AI factories. They will integrate massive computing power and data centres to train and develop complex AI models at unprecedented scale. The AI Gigafactories will lead the next wave of frontier AI models and maintain the EU’s strategic autonomy in critical industrial sectors and science, requiring public and private investments. A call for expression of interest for interested consortia is published today.
Private investment in Gigafactories will be further stimulated through the InvestAI, which will mobilise €20 billion investment for up to five AI Gigafactories across the Union.
To stimulate private sector investment in cloud capacity and data centres, the Commission will also propose a Cloud and AI Development Act. The goal is to at least triple the EU’s data centre capacity in the next five to seven years, prioritising highly sustainable data centres.

Increasing access to large and high-quality data

Bolstering AI innovation also requires access to large volumes of high-quality data. An important element of the Action Plan is the creation of Data Labs, bringing together and curating large, high-quality data volumes from different sources in AI Factories. A comprehensive Data Union Strategy will be launched in 2025 to create a true internal market for data that can scale up AI solutions.

Developing algorithms and fostering AI adoption in strategic EU sectors

Despite the potential of AI, only 13.5% of companies in the EU have adopted AI. To develop tailored AI solutions, boost their industrial use and full adoption in EU strategic public and private sectors, the Commission will launch the Apply AI Strategy in the coming months. European AI innovation infrastructure, including notably the AI Factories and the European Digital Innovation Hubs (EDIHs), will play an important role in this Strategy.

Strengthening AI skills and talents

To meet rising demand for AI talent, the Commission will facilitate international recruitment of highly skilled AI experts and researchers through initiatives such as the Talent Pool, the Marie Skłodowska-Curie Action ‘MSCA Choose Europe’ and AI fellowships schemes offered by the upcoming AI Skills Academy. These actions will contribute to legal migration pathways for highly skilled non-EU workers in the AI sector and attract the best European AI researchers and experts back to Europe. It will also develop educational and training programmes on AI and Generative AI in key sectors, preparing the next generation of AI specialists and supporting the upskilling and reskilling of workers.

Regulatory simplification

The AI Act raises citizens’ trust in technology and provides investors and entrepreneurs with the legal certainty they need to scale up and deploy AI throughout Europe. The Commission will also launch the AI Act Service Desk, to help businesses comply with the AI Act. It will serve as the central point of contact and hub for information and guidance on the AI Act.
Next Steps
With this Action Plan the Commission opens today two public consultations, running until 4 June 2025, to further shape these AI Continent Action Plan initiatives.

A public consultation inviting all interested parties to share their views on the Cloud and AI Development Act
A public consultation on Apply AI to identify stakeholder priorities, challenges to the uptake of AI, and the relevance of proposed solutions and policy approaches—including additional measures to ensure the smooth and simple application of the AI Act.

A third public consultation on Data Union Strategy will be launched in May.
In parallel, the Commission will organise dialogues with industry representatives and the public sector to help shape the Apply AI Strategy. These dialogues, together with the public consultations, will identify relevant examples of untapped potential in adopting AI technologies in specific sectors, their current integration in business and production processes, and opportunities for scaling up within these sectors and the wider economy.
Background
On 1 August 2024 the AI Act entered into force and guidelines on prohibited AI practices were published on 4 February 2025. On 24 January 2024, the Commission launched a package of measures to support European startups and SMEs in the development of trustworthy AI. On 9 July 2024 the amended EuroHPC JU Regulation entered into force, allowing the set-up of AI Factories. On 10 December 2024, seven consortia were selected to establish AI Factories, followed by six additional consortia on 12 March 2025. At the AI Action Summit in Paris on 11 February 2025, President von der Leyen announced InvestAI, an initiative to mobilise a €200 billion investment in AI across Europe.
 
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Governments should renew their efforts to better design, deliver, and review regulation and regulatory processes, according to a new OECD report. 
The Regulatory Policy Outlook 2025 – the OECD’s flagship publication on drafting laws and regulations, their implementation and review – highlights the efforts governments are making to advance policy objectives while adapting to rapid technological change and evolving policy environments. It identifies opportunities to reduce unnecessary regulations, while ensuring regulatory frameworks are focused on better outcomes for people, and contribute to a policy environment that supports innovation and strong and sustainable growth.
Regulations are often seen as burdensome for citizens and businesses, while their weak enforcement can raise concerns about government effectiveness in protecting people and the environment. Governments must renew efforts to design and review rules and build trust, the report said.
“To navigate today’s complex policy environment, with fast technological changes and growing demands for efficiency and effectiveness, governments need to ensure that regulatory frameworks are adaptive, efficient and proportionate to underlying policy objectives,” OECD Secretary-General Mathias Cormann said. “By tackling unnecessary regulations, and ensuring regulatory frameworks are focused on better outcomes, governments can contribute to a supportive policy environment for stronger and more sustainable growth. This fourth edition of the Regulatory Policy Outlook provides evidence-based recommendations for developing best practice regulatory frameworks to achieve these objectives.”
New analysis shows that OECD Members have made good progress toward improving stakeholder engagement, particularly by using digital platforms, extending consultation periods, and enabling the public to provide evidence on both the anticipated and actual impacts of regulations. However, there is room for improvement. Only 33% of OECD countries provide direct feedback to stakeholder engagement, missing the chance to make interaction more meaningful and encourage future participation. Broader consultations are also needed to ensure inclusivity and reduce concerns around undue influence.
Regulations are more likely to be effective when based on sound evidence. Governments have improved evidence-based decision making, requiring an examination of more social and environmental considerations alongside economic ones when using tools such as regulatory impact assessment. These efforts should continue and be followed by effective implementation of regulations, the report said.
Current regulatory frameworks often lag behind technological progress, and struggle with overlapping jurisdictions, legal fragmentation, and outdated rules. To better support innovation while managing risks, governments must embrace adapt and learn from experience to improve anticipatory governance, while also strengthening co-operation and co-ordination across authorities. The use of strategic intelligence tools like horizon scanning and strategic foresight can also help anticipate and mitigate risks, ensuring rules stay relevant and effective even as circumstances change.
Most OECD countries have scope to further support compliance and desired outcomes by adopting risk-based analysis. This would allow enforcement resources to be focused on where non-compliance would have the greatest impact, saving both businesses and government time and resources, while maintaining positive outcomes. However, less than 50% of OECD countries currently allow regulators to base enforcement work on risk criteria.
Significant challenges remain in implementing governments’ commitments to environmental protection while preserving economic growth. Only 21% of OECD Members review rules with a “green lens” of environmental sustainability across sectors and the wider economy. Deepening such reviews to consider the local and broader impact of pollution, carbon emissions and biodiversity is critical to ensure that regulations actively support the green transition.
To achieve meaningful environmental outcomes, governments should streamline the complex patchwork of rules with environmental objectives, viewing them as a system, reducing unnecessary regulatory burdens including across borders, prioritising risk-based regulation and focusing enforcement efforts on areas where the greatest risks to the environment exist.
To access the report, data, and summary, visit: https://www.oecd.org/en/publications/oecd-regulatory-policy-outlook-2025_56b60e39-en.html.
For further information on OECD work on regulatory policy, visit: https://www.oecd.org/en/topics/policy-issues/regulatory-reform.html.
Media enquiries should be directed to Lawrence Speer in the OECD Media Office (+33 1 45 24 97 00).
 
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