Lhe Europeans never stop lamenting. The disconnect with the American economy is increasing. No tech giant has managed to emerge on the Old Continent. The acceleration of industrial investments in China subsidized by public authorities threatens to overwhelm the European ecological transition market. The rearmament effort becomes obvious, but stewardship does not follow, due to lack of resources.
One of the keys to overcoming these challenges is, however, known: the integration of capital markets across the continent. Having broader, stronger and more resilient sources of financing would allow European companies to finally be able to compete with China and the United States. The EU no longer has the means to neglect this lever which would usefully take over from public subsidy policies which are running out of steam due to the high level of debt.
The European summit on April 17, devoted to competitiveness, should allow us to move from laments to solutions. The former president of the Italian council Enrico Letta will provide food for thought with a report on the need to complete European integration, particularly in the financial field. It will be followed, in June, by that written by the former president of the ECB Mario Draghi on competitiveness.
Mobilize excess savings
The idea of a capital markets union (CMU) dates back to 2014. Europe was then emerging from the financial crisis and its extension, the sovereign debt crisis. The time was more for the stabilization of financial markets than for the stimulation of investments.
A decade and a Brexit later, the UMC has transformed into a sea serpent: everyone talks about it, but the implementation leaves something to be desired. The share of financing of economies by financial markets is stagnating and household savings are still not sufficiently mobilized for future projects. “The relative size of the EU in global capital markets has shrunk – from 18% to 10% in sixteen years – and the share of European companies in the market capitalization of the world’s hundred largest companies has fallen from 11 % to 5% in seven years »deplores Fabrice Demarigny, former head of the European Securities Markets Authority, the European regulator of the sector, in the review The Great Continent.
The completion of the CMU nevertheless constitutes an essential building block for building the strategic autonomy to which Europe aspires by giving it the means to achieve its ambitions. By 2030, the ecological transition will require 620 billion euros per year of investments, the digital transition, 125 billion, according to the European Commission. These sums cannot be covered solely by public financing, hence the need to mobilize the European savings surplus in favor of long-term investment through the integration of capital markets. “The best European IRA we can have is the UMC”affirms to Echoes Charles Michel, President of the European Council, in reference to the American subsidy plan to attract investments in favor of the ecological transition.
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