Eurozone ministers to detail joint plan on capital markets, productivity By Reuters

By Jan Strupczewski

LUXEMBOURG (Reuters) – Eurozone finance ministers will announce next month what they want to do to boost the EU’s competitive position vis-à-vis China and the United States, including integrating the EU’s fragmented capital markets, which are key to financing such a policies.

The statement by the finance ministers of the 20 euro countries is to build on independent reports, commissioned by the EU earlier this year, on how to develop the EU’s single market and the bloc’s competitiveness.

The head of eurozone ministers, Paschal Donohoe, said after Monday’s talks in Luxembourg that there were still differences over how to approach the issue, but that by November areas of agreement should overcome the differences.

“I propose to return to this in November with the aim of agreeing a text that reflects our shared vision … of how we improve the competitiveness of our union in the years ahead,” Donohoe told a conference of the press.

The reports by former Italian Prime Minister Enrico Letta and former European Central Bank chief Mario Draghi cited weaknesses in the EU’s single market and sluggish EU productivity growth at a time when China and the United States are vying for leadership in new, green technologies. . One of the main challenges is finding the roughly 800 billion euros of annual investment needed in technological change, Draghi’s report said.

He stressed the need for a unified capital market in the EU, which would direct large European economies to help innovative companies in Europe, rather than being invested in the US.

But talks on a Capital Markets Union (CMU) have been going on for a decade and have seen very slow progress due to entrenched national interests, different financial and business cultures and regulations in European countries.

A CMU would unify national rules on bankruptcies, prospectuses, capital gains taxation, listing requirements or the different tax treatment of debt and equity in an attempt to make it easier for companies to issue shares and bonds and educate European economies about investments. .

Frustrated by the slow progress of an EMU, France proposed in February to allow small groups of countries to move forward with deeper financial integration, instead of trying to reach a consensus among 27 governments.

Germany and several other countries have been reluctant to allow such an approach, but Spain repeated the proposal on Monday, and Donohoe said it was a signal that urgent action was needed.

“My strong preference is for all countries to move forward together,” he told a news conference. “But I understand why countries feel the need to look at what is possible to enhance their cooperation.”

“This is the second time this year that it’s happened, and this has to act as an additional catalyst, an additional sign of urgency for all of us to find a way to move forward together,” he said.