Bruno Le Maire proposes the creation of a European savings product

France proposed on Friday the creation of a “European savings product” with the EU states that wish it, in order to mobilize private capital in the service of growth, an idea immediately rejected by Germany. This product would aim to better direct the savings of EU citizens towards the long-term financing of businesses, using attractive taxation. It could, for example, take the form of a European retirement savings plan (PER), the French Ministry of Finance explains.

“Let us launch a European savings product in 2024, the characteristics of which we will define, the yield, with the voluntary states,” proposed the French Minister of Finance Bruno Le Maire, before a meeting with his counterparts from the Twenty-Seven in Ghent (Belgium). ). According to him, a handful of countries could initially participate in this initiative to build a capital markets union in Europe, a sea serpent of European summits.

“It might be 2, 3, 4, 5 states, whatever. But as it is impossible to start immediately with 27, let’s start with a few,” said Bruno Le Maire, without specifying which these voluntary states could be. The European Union suffers from the fragmentation of its capital markets, divided between the different member countries. The capitalization of European stock markets is four times lower than that of American markets. The EU has been discussing proposals for years to benefit from scale effects comparable to the United States. But these debates stumble over divergent national interests.

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

There is certainly already a pan-European savings product, created in 2019, the PEPP (Pan European Personal Pension Product), but its distribution faces pricing and taxation that is not harmonized from one Member State to another. The German Minister of Finance, Christian Lindner, however, rejected the French initiative in Ghent.

France and Germany recently signed a joint forum to relaunch the capital markets union project, recalled Bruno Le Maire, “but it’s good when actions match words,” he joked. . “I plead for a union not at several speeds, as my friend Bruno says, but at full speed, that is to say one which advances quickly with the 27”, replied Christian Lindner. “It is not excluded that bilateral or small committee initiatives are also possible, but the objective must be to move forward together,” he said.

Bruno Le Maire also proposed to EU asset managers, banks and stock exchanges “voluntary European supervision” which could be exercised by the European Securities and Markets Authority (ESMA) based in Paris. He also put on the table a “guarantee for securitization” project, so that “securities stop weighing on the balance sheets of banks” and so that they can “lend more to individuals and businesses”.

“Europeans' money is sleeping instead of working,” said the minister. “If we want European money to work instead of sleeping, the Capital Markets Union must be put in place without delay and there must be progress from 2024.” He estimated the savings of Europeans at some 35,000 billion euros, of which “more than 10,000 billion are sitting in bank accounts”, or a third of the total, compared to less than 15% in the United States.

“We have a decisive battle ahead of us, that is growth,” he said, referring to the EU's disconnection from the United States. “No one can accept that European growth is one point below American growth.” The GDP of the euro zone was equivalent to that of the United States in 2008, but 15 years later, it is 20% lower.