Brussels, Belgium. Investors and policymakers said on Tuesday that Europe must unlock trillions of euros in private savings to finance the economic transformation needed to compete with the United States and China.
They said confidence, policy coordination and regulatory changes would be needed to direct more household wealth away from low-risk assets and into investment.
Private savings seen as key funding source
Benoit Peloille, chief investment officer at Natixis Wealth Management, said Europe holds €35 trillion ($40.7 trillion) in private savings, which he said was enough to support the transitions the region needs to make.
He said Europe must create enough confidence and stability to ensure that private savings do not remain in very low-risk assets and are instead used to finance those transitions.
Draghi warning cited
Speakers referred to a 2024 warning from former European Central Bank chief Mario Draghi, who said the European Union needed to better coordinate industrial policy, make decisions more quickly and attract large-scale investment or risk a “slow agony” as the United States and China advanced through innovation in AI.
Signs of policy momentum
Alison Martin, chief executive officer for life, health and bank distribution at Zurich Insurance, said there were signs of political momentum and that European policymakers had responded to Draghi’s recommendations.
She pointed to initiatives including the Digital Omnibus Agreement and the creation of savings and investment accounts as evidence of the EU’s willingness to deregulate and encourage investment.
Martin said the next six months would show whether Europe was ready to step up.
Competitive gap with the United States
Nizar Trigui, chief technology officer at global logistics firm GXO, said the EU still had a long way to go to catch up with the United States, which he said benefits from lower energy prices, more flexible labour laws and much faster deployment of AI.
According to the United Nations’ World Intellectual Property Organization, the United States accounts for 55% of the world’s unicorns, or startup companies valued at more than $1 billion.
The speakers said the U.S. position also reflects an easier environment for raising capital.