2024-04-25 09:53:16
How to facilitate access to capital on European markets? Christian Noyer, the former governor of the Bank of France, has been working on the union of the markets, his conclusions will be presented in the morning. Perhaps the beginning of an answer to the puzzle that divides Europe.
Unlike goods and people, capital still cannot circulate freely within the Union. This is why it remains very complicated to raise the hundreds of billions necessary to finance the energy transition, defense or innovation. Start-ups know this better than anyone. Banks, the most common instrument for financing the European economy, are often too cautious to support them. The most promising rely on foreign investors, especially American, to develop. The 27 have been talking about the liberalization of the capital market for ten years. Ten years of negotiations and still no agreement in sight.
The resistance of small European states
At the last European Council, a dozen states joined forces against all the initiatives recently put forward by the France. Paris, with the support of Germany, Poland, Italy and Spain, wishes to provide Europe with a market commensurate with its GDP and its needs. But small states, like Luxembourg, Ireland or the Baltic countries, are opposed to any rapprochement. The accommodating regulations or tax regime that they have put in place to attract capital could be called into question by the union of the markets.
The report presented this Thursday, March 25 by Christian Noyer seeks to break this impasse with concrete proposals. They will serve as a basis for technical work. The political agreement will not be found before the formation of the new commission planned for the fall.
A new European savings product
To finance the European economy, Christian Noyer is offering a new European savings product. A product which would benefit from a European label, but which could be available in each country according to its specificities. The product will have to be attractive enough to drain the savings of individuals sitting in bank accounts. According to Bruno Le Maire, the Minister ofEconomy, favorable to this European savings plan, 35,000 billion euros would be available, blocked on life insurance or other savings accounts in the 27 Member States. The money would be 80% invested in European companies.
The other avenue concerns the banks. Christian Noyer suggests transforming their debts into a package of securities that they could resell on the private debt market. This securitization would reduce their balance sheet, giving them room to maneuver to finance the real economy. This is what is commonly practiced in Anglo-Saxon countries, sometimes in defiance of the very strict international rules put in place after the 2008 financial crisis. Christian Noyer considers that European regulations are already sufficiently protective. The former governor finally wants to improve market regulation by centralizing it, a subject which will undoubtedly still require a lot of discussion before reaching a conclusion.
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