The European Commissioner for Financial Services and the Savings and Investment Union, María Luis Albuquerque, defended this Monday at the Fórum Europa in Brussels the importance of the Savings and Investment Union in ensuring Europe has a true financing ecosystem that allows it to be competitive, since diplomacy alone "is not enough" to maintain global relevance.
The commissioner made this statement during her speech at this meeting organized by the New Economy Forum in the EU capital, where she explained that this visionary initiative seeks to broaden the European investment base, providing retail investors with the necessary tools to invest "prudently and confidently" in Europe's long-term future.
"We must ensure that our economy and our strategic capabilities speak for themselves", she asserted, noting that while the European economy has been structurally underperforming for some time, the EU's economic fundamentals are "solid." As an example of this, she noted that inflation in Europe is declining and is now below the European Central Bank's 2% target.
She also stated that the path is being paved for Europe to achieve lower financing costs, as its public debt and budget deficits are "more contained" than in many other major economies. Also emphasized that Europe already produces almost as many STEM technology graduates as the United States and that its patent granting rate is competitive.
"We have the financial resources to support our ambitions. European households save around €1.3 trillion per year", the Commissioner emphasized, also highlighting the green transition undertaken by the EU to achieve clean, secure, and affordable energy —"by 2030, 40% of our energy consumption is expected to come from clean energy"— and recalling that Europe is the main trading partner for more than 70 countries and is catching up with us through new trade agreements.
Despite all this, Albuquerque warned that without "significant additional investment", Europe will not be able to boost innovation, sustain growth, and strengthen its resilience to external shocks. "We need more investment, which implies a deep, dynamic, and interconnected capital market at the core of our economy", she asserted.
Regarding the Savings Union, she stressed the importance of unlocking more financing to help businesses and implement the EU's strategic priorities. "We need to expand our investor base, making it easier for citizens to invest. This will mean fairer access to financing and more attractive long-term investment options, including retirement savings".
She also emphasized that a "more robust and connected" financial sector will help reduce costs and offer people more options, making it easier to convert savings into investments. She warned of the low level of private investment in the EU because European savers are more reluctant to invest than Americans. Regarding this circumstance, she explained that it is largely due to the low financial literacy of EU citizens.
"According to the Eurobarometer, only 18% of EU citizens have a high level of financial literacy. For young people between 18 and 24, this percentage drops to 13%. To address this issue, we will show them what they have earned and what they will receive upon retirement", she recalled.
She also indicated that they will review the rules on the European venture capital fund label to facilitate equity financing for our high-tech and innovation companies.
She also noted that work is underway to increase the level of securitization by banks in Europe. "This is a process that allows banks to reorganize part of their assets, specifically loans, and sell them to other financial market participants, such as insurance companies, pension funds, or other banks", she clarified.
Regarding investment and financing, she indicated that they will work to facilitate companies' access to diversified sources of financing, including cross-border sources.
Finally, she clarified that it is based on four pillars: citizenship and savings, investment and financing, integration and scale, and efficient supervision. "This Union is a key element in our strategy to respond decisively to current geopolitical, political, and economic challenges with agility and unity", she concluded.
