“More than 10,000 billion people are sleeping…” Bruno Le Maire proposes a European savings product

Objective: Raise private capital for growth. French Finance Minister Bruno Le Maire on Friday proposed creating a “European Savings Product” with EU states that want it. “Let’s start a European savings product in 2024, whose characteristics and operation we will define with the voluntary states,” declared Bruno Le Maire before a meeting with his counterparts of the Twenty-seven in Ghent (Belgium).

He raised the possibility that a handful of countries would participate in this initiative to create a capital markets union in Europe. “It could be two, three, four, five states, whatever. But since it is impossible to start immediately with 27, let’s start with a few,” said the French minister, without specifying which voluntary states could be.

“I am very impatient”

The European Union suffers from the fragmentation of its capital markets, divided between different member states. It has been debating proposals for years to benefit from scale effects comparable to the American market. But these discussions stumble upon divergent interests within twenty-seven.

“I have a lot of impatience (…). I am not coming to Ghent to chat to my finance minister friends,” said Bruno Le Maire. “I am not coming to publish the 10th, 15th or 20th press release on the Capital Markets Union in which Nothing or almost nothing.” Efficient capital markets make it easier for companies to finance their projects and for individuals to find better investment deals.

A saving of about 35,000 billion for Europeans

“If we want European finance to work rather than sleep, we must establish the Capital Markets Union without delay and make progress from 2024,” the minister said. He estimated Europeans’ savings at 35,000 billion euros, of which “more than 10,000 billion are sitting in bank accounts”. The money “should work for growth, innovation, research, businesses and employment,” he added.

“The decisive battle ahead of us is growth,” he said again, referring to the EU’s alliance with the United States. “Nobody can accept that European growth is one point below American growth,” he said.

In addition to a European savings product, Bruno Le Maire proposed “voluntary European supervision that could be exercised by a European financial market authority” of asset managers, European banks and stock exchanges. He also tabled a project for “guarantees for securitization”, so that “securities stop weighing on banks’ balance sheets” and so they can “lend more to individuals and businesses”.