One of the main focuses of the next legislative mandate in Europe will be how to boost competitiveness. Former Italian Prime Minister Enrico Letta’s report called for ending the Capital Markets Union as part of an evolution of the project that came to be called the Savings and Investment Union . To try not to lose the race against China and the United States, the Italian assures that there is an “impetus” to complete this integration between the Twenty-Seven, and the president of Banco Santander, Ana Botín, suggests starting with the mutualization of community debt.
“We have never experienced such dynamics in the last fifteen years,” Letta said in her speech at the 2024 International Banking Conference organized by Banco Santander. He considers that governments, at this stage, should not constitute an obstacle. Even if the most difficult part of integration, that of the euro, has already been completed, said the Italian. He thus listed as direct repercussions of the incompletion of the project the lack of jobs, growth or financing ending in the US market.
The first step to complete market integration, according to the president of the entity, Ana Botín, is debt mutualization. “The single capital market… we all want it, but let’s be realistic, when is it going to happen? I’ve been doing this for a long time, I’ve heard speeches and lots of ideas and it’s not not come together. Pooling is a very simple path”he indicated.
Botín highlighted the “over-indebtedness” carried by the governments of the Member States and considered that such pooling can be articulated as a stimulus for the capital market union project. Even if, ultimately, the underlying problem is a “lack of political commitment”.
Competitiveness will be the main issue addressed by European leaders next week in Budapest, Financial Services Commissioner Mairead McGuiness has put on the table. A meeting from which he hopes that the heads of state and government will provide their finance ministers with guidelines which will establish “objectives” and not “limits” advance the free movement of capital in the EU and access to liquidity.
The fundamental problem and one of the challenges to be solved was explained by the President of the European Investment Bank, Nadia Calviño: in Europe there are a large number of innovative companies, but the fragmentation of the market makes it difficult to access to financing. Reason why these companies They are heading towards another, more integrated market: the United States. In this sense, McGuiness urged the leaders of the Member States to engage in the initiative and move forward on some of the points that keep the Banking Union or the Capital Markets Union blocked, such as respectively the insolvency systems and the single surveillance system.
“We have a productivity problem in Europe compared to the United States. It’s simple, in our debates we think that China is one and that the United States is one and that Europe is one. But no. In energy, telecommunications, financial services or defense we are not one, we are 27″, underlined the Italian. “We must make it clear: our national sovereignties make the United States and China happier because we lose jobs and economies.. “The difference in the defense industry is incredible because of the fragmentation.”
In this effort, Letta and McGuiness chose to reduce bureaucracy. In fact, the Italian proposes, to avoid a national interpretation of European legislation (which generates more fragmentation), to use regulations rather than directives. As part of his report, he also suggests creating a twenty-eighth legislation applicable at European levelso that businesses can choose to accept the national or community system according to their preferences.
In this sense, Botín also defended what is one of his traditional demands, the reduction of the administrative burden and legislative harmonization within the EU, to reduce the regulatory burden affecting the financial sector.
