Eurogroup: Le Maire's appeal for the union of the capital market

The Eurogroup met on Friday, February 23 in Flanders in Ghent  The French request to accelerate the EU capital market union

In Ghent, French Minister Bruno Le Maire called on European governments to urgently reach an agreement on the capital market union for further integration. The Parisian economy minister specifically addressed governments that are willing to proceed "on a voluntary basis" in a "new decisive battle, that of growth." With emphasis, the French economy minister evoked the specter of years of stagnation: "No one can accept that European growth is below that of the US. No one can accept that growth prospects in Europe are recession or stagnation."

Le Maire proposed 'a voluntary European oversight that could be exercised by the EU financial markets authority,' the prospect of launching a voluntary European saving product, and common 'voluntary securitization' to mobilize the huge savings available for investment.

Specifically, Paris proposed to the Eurogroup that voluntary European oversight be carried out by the ESMA, the European financial markets authority, with investment banks, stock exchanges, and asset managers adhering to this voluntary supervision.

The second proposal is to establish a European savings product with states that wish to launch it in 2024. A similar product has been likened to the model of the single pension fund already implemented in France, with great success in the markets. The idea is to conduct an experiment as a trailblazer.

The EU must resume growth

According to Le Maire: “European growth must be freed from its chains, and the first chain is money, there is not enough of it available. Europeans' money is sleeping instead of working, and if we want Europeans' money to work instead of sleeping, we must achieve the Capital Markets Union”.

Le Maire's challenge is twofold: to remain competitive with the USA and China while honoring commitments on climate and security, and at the same time, to resume growth.

The private savings of Europeans amount to a significant figure. There are well over 35 trillion euros, with more than a third of this, over 10 trillion, deposited in bank accounts.

The objective of a single capital market dates back to the Treaties of Rome, but it was only in 2015 that the European Commission, following the 2011 crisis, presented its first action plan for the Capital Markets Union. There are still obstacles regarding supervision rules, taxation, and insolvency. It is on these fronts that the French proposal of this February 2024 aims to make the European Union take steps forward that, according to Paris, are necessary to find resources to remain competitive in the global economic landscape.

Antonio De Chiara @euroeconomie.it