Speakers
Objectives
The central issue behind the modest economic growth in Europe over the past 20 years revolves around productive investment. Investment is the lifeblood of competitiveness and productivity.
After the global financial crisis, net investment in the United States and Europe fell significantly, but the decline was particularly pronounced in Europe. This has resulted in a sluggish economy in Europe, characterized by a decrease in medium- and long-term projects. These risky long-term investments do not occur when real interest rates are zero or close to zero, as fund holders (savers, investors) prefer to hold liquid assets that they can mobilize at any time.
The objective of this exchange of views is to define the priorities for enhancing public and private risk sharing and implementing an effective policy mix that should contribute to revive productive investment in light of the significant economic divergences across Member States.
Points of discussion
- What are the economic prerequisites for increasing “public risk sharing” in Europe? Can Europe realistically progress towards a fiscal union given the significant economic divergences between Eurozone countries, especially between Germany and countries like France and Italy?
What policy mix should be implemented to revive productive investment in Europe, and enhance asset returns within the EU?
- To what extent do banking and financial fragmentation in Europe, and the low international competitiveness of European financial players , weaken the EMU? How can private risk sharing in Europe be increased through banking integration when there is no consensus within the Council to progress towards a Banking Union (cf Eurogroup decision of June 2022)?
How can we transition from a bank-financed economy to one based on risk-taking and equity in such a macroeconomic context? Is the Eurogroup’s encouraging statement of March 2024 necessary and sufficient to achieve this?