On Friday 23 February in Ghent, Belgium, the French Minister for the Economy, Bruno Le Maire, called on the Member States to “free European growth from its chains” by massively mobilising the private savings of EU citizens. At the same time, the Eurogroup, in an inclusive format, has begun work on a declaration that will detail the initiatives to be taken during the EU’s next legislative cycle (see EUROPE 13354/16).
“More than €10,000 billion are sitting in bank accounts. The money of Europeans must not sleep, it must work for growth, it must work for innovation, it must work for research, it must work for business, it must work for employment”, declared Mr Le Maire before the start of an informal meeting of European finance ministers in Ghent.
In his “Ghent appeal”, Mr Le Maire proposed European supervision of the markets, hoping to count on the voluntary involvement of financial institutions. He also proposed the creation of a European savings product to “better channel the savings of Europeans towards financing European businesses”. This financial product “would have as its main characteristic an attractive tax regime that provides incentive for long-term investment”, said Mr Le Maire.
The French proposal includes the establishment of a guarantee for securitisation, a financial technique aimed at repackaging receivables into financial securities that can be sold to investors.
The French minister’s ambitions on the capital markets union (CMU) were shared by his German counterpart, who noted the increased international competition with regret.
“Our handicap is that we do not have a capital market as efficient as that of the United States of America, for example. It is therefore right that we should make further efforts towards a capital markets union”, said German Finance Minister Christian Lindner.
“We need to mobilise capacities, particularly those of small investors, and ensure that our companies remain in our markets, our stock exchanges”, said the Spanish Minister for the Economy, Carlos Cuerpo.
The EU faces the flight of net financial flows. According to Christine Lagarde, President of the European Central Bank, the relocation of European companies to seek financing would cause €250 billion, or 1.8% of the EU’s GDP, to leave the EU each year for the rest of the world, particularly the United States.
At a press conference at lunchtime on Friday, Ms Lagarde estimated the cost of defence spending, set at 2% of GDP per NATO member country, at €75 billion, while €800 billion would be needed each year to finance the reduction of greenhouse gas emissions in the EU by 90% by 2040.
All the ministers agreed on the “urgent need for action”, said the President of the Eurogroup, Paschal Donohoe, at the end of the discussions at lunchtime on Friday. With this in mind, the Eurogroup is expected to detail its three “ABC” priorities for the CMU at its next summit on Monday 11 March: ‘Architecture - Business - Citizen'.
“The CMU is not a ‘nice-to-have’. It is a must-have and an urgent one. I think this was very clear in the discussion today.”, said the Commissioner for Economy, Paolo Gentiloni.
Link to the statement by the French Minister for the Economy: https://aeur.eu/f/azg (Original version in French by Bernard Denuit)