“I have not come to Ghent to make a mess,” the French Minister of Finance, Bruno Le Maire, warned this Friday at the informal meeting of the Eurogroup held in the Belgian city, where the economy ministers of the euro zone were preparing to debate the umpteenth statement on its commitment to the creation of a European capital markets union. Inside, he was less diplomatic: “I'm fed up, we need to take action now,” Le Maire said.
The French delegation arrived at the meeting with an unexpected proposal under its arm: start with a small-scale union, voluntary only with countries that want it, and in a few months launch together a first common savings product with which to “demonstrate” the advantages of the model. Spain, Italy and the Netherlands have declared interest in participating in the French intergovernmental plan, which did not go down well with the EU institutions and caused a tense debate among ministers.
“We will be three, four, five countries, it doesn't matter. But since it is impossible to start quickly with 27, let's start some,” said Le Maire. "Let's launch this same year, 2024, a European savings product whose characteristics and performance we will decide with the countries that want it." Its objective, “put the savings of Europeans to work”, “release the chains that have tied growth” and prevent European companies, both large and startups, from having to go to the United States or the Gulf countries when they need to grow. .
Announced in 2015, the project to create a union of European capital markets continues to sleep the dream of the righteous due to an accumulation of technical issues but which, for Paris, actually denote a lack of political will and ambition that the In these moments of urgency, the EU cannot afford to find financing for the massive investments it must make in the coming years in the field of defense and the energy transition.
“We are willing to move forward with a high degree of ambition in the single capital market and, of course, we will be present in these discussions,” said the Minister of Economy, Carlos Corpo. "In the coming weeks we are going to analyze the different proposals, always with the ambition (...) that we must move forward quickly." A key issue of the French plan will be to “achieve sufficient critical mass” to “avoid fragmentation,” Corps added, concerned about the need to “close the gap” with the United States. “We have to mobilize private capital, from retail investors, and mobilize it in the most efficient way so that our companies remain in our markets and stock exchanges.”
Le Maire's project is based on the successful experience of launching a retirement savings product in France that has been subscribed to by almost 10 million savers and raised 100 billion euros. Paris plans to work on three tracks at the same time. Firstly, encourage banks, investment funds and asset managers who wish to do so to submit to the supervision of the European Securities and Markets Authority (ESMA). In parallel, work on the launch, before the summer, of a common savings product with identical entry and exit conditions in all the countries that issue it and the same returns. And, thirdly, create a guarantee for securitization so that banks can dedicate more resources to lending money to companies and individuals, an instrument that has fallen out of favor in the financial crisis that “is beginning to lose its stigma,” according to diplomatic sources.
The president of the European Central Bank, Christine Lagarde, put some figures on the table to illustrate the “urgency” to create a capital markets union: the 800 billion euros that the EU must invest between 2030 and 2040 to achieve its climate objectives, 75,000 million that should be spent annually on defense to meet the objective of 2% of GDP agreed upon in NATO... Or the unsustainable comparison with the United States, where the stock market capitalization is equivalent to 227% of the GDP compared 80% in the EU.
The statement approved by the Eurogroup in Ghent includes elements of the French plan and goes further than the previous ones. The president of the Eurogroup, Paschal Donohoe, expressed confidence in the ability to move forward as a bloc, the option that Germany defends. “I am not in favor of a capital markets union at various speeds, as my friend Bruno says, but rather a capital markets union at maximum speed, that is, moving quickly with the Twenty-Seven,” said German Christian Lindner. Le Maire, on the other hand, has concluded that this route is impossible.
