myBetween 2010 and 2023, the gross domestic product (GDP) of the European Union (EU) grew by 21% and that of the United States by 34%. This decline in Europe is explained by the disadvantages mentioned in countless reports for several years: declining demographics, insufficient expenditure on research, a mediocre educational system, little industrial autonomy, insufficient number of hours worked annually (1,500 in France compared to 1,799 in the United States, according to the OECD), electricity prices two to three times higher than those in the United States, expatriation of start-ups, excessive bureaucracy, non-application of the principle of European preference (78% of defence expenditure and industrial orders are placed outside Europe), a market widely open to Chinese imports…
We find most of these weaknesses in Mario Draghi’s report. The former president of the European Central Bank puts things bluntly, for example when he denounces Brussels bureaucracy and advocates the application of the subsidiarity principle, or when he claims that the rules of the European energy market “preventing industry and households from taking full advantage of the benefits of clean energy on their bills”.
But the novelty of the report is mainly related to the financial solutions envisaged to cope with an additional investment of 800 billion euros per year. The report proposes developing securitisation to lighten the balance sheets of banks, which would then be able to lend more. A path that must be examined with caution, given the unfortunate American experience that led to the 2008 crash… Three other proposals are frankly questionable: the relaxation of banking regulation, the acceleration of the union of capital markets on the American model, the periodic issuance of joint debt.
The relaxation of regulation imposed on banks is not a technical matter that concerns only insiders. Our fellow citizens have suffered too much from the financial crises for us to avoid making the same mistakes. On the surface, this relaxation is praiseworthy because it would allow banks to lend more. But the truth is that we have not yet succeeded in erasing the reform of June 2004, which allowed banks to calculate their own regulatory ratios. It is legitimate to compare the ratios calculated by banks with those calculated by regulators. Using the fact that the United States does not apply this regulation as a pretext is a curious argument from the point of view of financial stability. Strong European banks are an attractive factor for capital. The report recalls in this regard that, within the framework of the banking union, the State is prohibited from intervening in the event of difficulties of a large bank. A truly unrealistic recommendation given the interests at stake and the urgency of action, as we saw in the United States in the spring of 2023, when the federal government and the Federal Reserve had to come to the aid of three failing banks.
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