Committee on Economic and Monetary Affairs with MEP EUROPEAN PARLIAMENTARY WEEK 2026
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Costas Mavrides
We can identify obstacles early, share best practices, and hold our governments accountable for the timely transposition and effective enforcement of EU law. At the same time, financing must be both strategic and efficient. The next MFF, including instruments such as a proposed European Competitiveness Fund, must not simply reallocate resources but also stimulate private capital, support innovation ecosystems, and reduce Europe's structural investment gap. Public funding alone will not suffice, but it must act as a catalyst to attract private capital. EU households hold trillions of euros in savings, yet a comparatively small share is channeled into productive investments.
Meanwhile, European startups often relocate to access deeper pools of capital elsewhere. That is not due to a lack of talent, but due to structural barriers. As regards technological sovereignty, the EU remains highly dependent on third countries for critical raw materials, advanced semiconductors, and certain key technologies. Unfortunately, the EU's dependencies have become vulnerabilities. Dear colleagues, Europe's long-term growth will depend on our ability to lead in clean technologies, digital transformation, advanced manufacturing, and strategic sectors such as semiconductors, AI, energy storage, and biotechnology.
The green and digital transitions are not constraints on competitiveness, but its future drivers. If we want European citizens to feel that the single market works for them, that it creates quality jobs, supports SMEs, reduces dependencies, and strengthens Europe's global standing, then we must demonstrate political resolve and take decisive action to further deepen and integrate our single market. Otherwise, we will remain on a path of discussing missed opportunities. With these thoughts, I look forward to a fruitful discussion and to hearing your perspectives. Thank you.
I now give the floor back to my esteemed friend, ECO Member Gustav Navridis, to make some housekeeping remarks and introduce the speakers of session one.
Thank you, co-chair Dokrito Cristiana, for your introductory remarks. To initiate our discussion, our invited speakers will provide introductory statements for 5 minutes. After their contributions, we will open the floor to members of the national parliaments as well as to those of the European Parliament. At the end, speakers, we have no more than around two minutes, but certainly no more than three minutes, to reply to the questions and give some concluding statements. Please keep your interventions to two minutes in order to allow as many people as possible to take the floor.
However, you need to fill in the speaking card. They are all available in the meeting room. Can I show you one?
It's green. For this session, it's green.
Costas Mavrides
Ah, for this session, as has been said, it's green. This one. So, you have to fill out this card. I'm just reading straight from this piece of paper that the structures are available in the meeting room and are to be filled both by national parliamentarians and MEPs who are willing to take the floor. In general, we would try to divide the speaking time according to the following formula: two national parliamentarians followed by one MEP.
Again, should the need arise, we might need to adopt this formula during the debate as it goes on. Let me now welcome Mr. Guldrum Wolf. I hope I pronounced the name correctly. Senior fellow at Bruegel. Mister Zach Meyers, director of research at CEREC, and Mister Ben Butters, chief executive officer at EuroChambers.
Thank you, Mr. Wolff. Let's start with the first speaker. I will give the floor for three to five minutes to each speaker, starting with Mr. Wolff. You have the floor.
Speaker 6
Well, thank you very much, Mister Chairman, and Chairpersons for the invitation. It's a pleasure to be here in my role as professor at the University Libre de Bruxelles and as a senior fellow at Bruegel. So, I'm very happy to speak about the topic, but of course, it's impossible to cover this topic in five minutes. It's a vast topic. And, of course, I could remark on many of the issues mentioned, including the fact that we have lots of savings and need to channel these savings into productive European investments.
Speaker 5
One of the key obstacles to that is, of course, the fragmentation of the single market, which makes it very difficult for firms to scale easily. But instead of doing that, I thought I wanted to focus on one area where, at the moment, Europe spends a lot and has increased its spending significantly, and that's defense spending. And defense spending is interesting not just for its security implications, but also because it has growth implications, single market implications, and implications in terms of industrial policy. So, let me be very concise. I mean the first point: as you all know, defense spending has increased very substantially in the last couple of years.
Speaker 4
We have more than doubled by now the spending on military equipment compared to only 10 years ago, and that increase has meant that many European defense companies have received a lot of orders, but also a lot of U.S. U.S.-based defense companies. And my second point is, if you look at the data, what we see is still that European companies buy a lot nationally, but the increase of the last years also went quite a bit to the U.S. S. Firms that are selling advanced high-tech weapons to Europe.
And, of course, this is totally natural. When you increase demand for a good and the supply is scarce, you will see that there will be more imports. But there is, of course, both a security dimension, a technological independence dimension, as well as an economic growth dimension to this. I want to spend a bit of time on that and basically urge all decision makers to think very seriously about technological dependence resulting from military purchases from abroad, highlight the growth benefits of military purchases towards domestic and European firms, and conclude by saying we really need to advance the integration of European defense markets because that's the one area where we all really spend a lot. Right?
I mean, the spending on defense has gone up. We can hope that we do industrial policy on all kinds of things, but this is the one area where everyday procurement decisions are being made, where spending is actually going up, and where we know that defense spending can be well spent or less well spent. So, what's the issue? The issue is that, as we have a pretty fragmented market for defense goods and we buy mostly national, for everything that is a little bit more complicated and where scale is needed—which is arguably the digital space in many respects, digital infrastructure, digital software underpinning weapons—we actually often turn to the United States because our domestic national markets are too small. And, you know, at Bruggel, we have published a piece in which we studied all the U.
S. Foreign military sales to the world in the last 18 years show how much Europe has become a customer in recent years. And this really leads to some technological dependencies that are very significant. I mean, it has the advantage that we buy very advanced weapon systems that are very good. But it also has the disadvantage that if these dependencies were to be used or exploited in a context of difficult transatlantic relations, they create vulnerabilities.
And that means even weapons that are European weapons may be weapons that, at the end of the day, depend on the core software from the U.S. S. Software is therefore possibly subject to political attention. So, what is the solution? The solution is that we have to increasingly turn defense spending for high-tech weapons towards European firms.
That has the benefit of reducing dependence on security. It also has the benefit of actually boosting economic growth. And let me just spend 10 seconds on that. Economic growth of defense spending is by now a pretty well-established fact. There's a wide literature that shows how the U.S.
S. Defense spending over the last century has literally been instrumental in boosting technological breakthroughs that have afterwards benefited the economy as a whole. So, redirect defense spending towards domestic companies and ideally do that in a more integrated European defense market, which basically means we have to give up some of the national preference that we have at the moment, which is very much related to Article 346 of the EU treaties. So, this is something where I think action would bring a lot of benefits in terms of security, growth, and the integration of the single market, and therefore contribute to our technological sovereignty. Thank you so much.
Costas Mavrides
Thank you, Mr. Wolff. Let's move on to Mr. Myers. Mayor Mister Myers, you have the floor for your five minutes.
Speaker 8
Thank you very much to the chairs for the opportunity to be here. If you're not aware of us, Sarah is an independent think tank focused on the digital and energy sectors. The topic of this session has a lot in it, but I think it well identifies the many different economic dilemmas that Europe now faces. In this opening, I want to focus a little bit on my own policy expertise in the digital space and think about digital sovereignty and what Europe's strategy should be. My key message is that when we are deciding which technological dependencies we want to address and how we want to address them, we need to be realistic and accept the trade-offs that this entails.
Speaker 7
Mario Draghi's 2024 report on competitiveness showed that Europe's economic problems can only be solved by the bloc embracing the diffusion and use of technology throughout all sectors of the economy to increase productivity. And, in the short term, this poses a profound dilemma. The EU is not keeping pace with the US and China in most technologies that are expected to be key to future economic growth. Only 6% of AI startup funding is going to European firms, for example. And the EU's global share of the ICT sector fell from 21% in 2013 to 11% in 2022, which is a huge decline.
So, the result is that we have no choice but to remain open to foreign technology while, at the same time, finding ways to boost the prospects of European tech firms. This is kind of an inconvenient truth, but a lack of realism about this trade-off has previously led some of our policymakers to promise everything, everywhere, all at once, and not achieve much for sovereignty at all. We can see this in the long list of European digital industrial policies that did not deliver, from the CHIPS Act to GAIA X to the many attempts to create a European search engine, for example. So, I want to propose the following suggestions. Firstly, it is a duty of policymakers and lawmakers to be clear and specific about the objectives that we want to achieve.
Sovereignty can mean many different things in many different contexts. In some cases, we are worried about foreign governments having access to our data. In other cases, we are fearful of a kill switch or the economic disruption that the weaponization of supply chains can achieve. In other cases, we are concerned that foreign companies are capturing too much of the value in tech supply chains or that we are losing our technological lead. And so, we cannot hope to design effective solutions unless we are clear about which problem we want to solve in which particular context.
And, of course, those goals will differ from sector to sector. Secondly, we need to prioritize. We care about sovereignty in many different domains, from cloud computing to how we make payments in Europe, to artificial intelligence, to chips. We do not have the fiscal capacity in Europe to make all of these sectors sustainable in a kind of "manufacturing in Europe" type of way, all at once, given the huge sums required to do that. China's state-led investment in chips, for example, has probably exceeded 150 billion US dollars since 2014, which really pales in comparison to the amount that Europe can bring to the table.
Besides, of course, digital supply chains are global, and they rely on local specialization, so it just isn't plausible that Europe or any part of the world can eke out a comparative advantage in all of these activities. So that means we have to think strategically, considering what we can do ourselves and also what we can do with global partners who are like-minded and trustworthy, rather than always reverting to industrial policy when tools like trade diversification could achieve the same goal more effectively. And that brings me to my final point now, which is that we need to match our goals with realistic, targeted solutions. Some interventions will probably require public subsidy or buying European as a solution, but alternatives can sometimes be superior. Some of these would include regulatory rules in Europe that could double down on enabling portability and interoperability, so that European customers using American or Chinese digital services are not locked into one supplier, and so that European companies have a better opportunity to enter the market.
Secondly, in some cases, we should expect global companies to do more to respect European values and to mitigate geopolitical risks when they are serving European customers, whether that means keeping data onshore or using what are called sovereign cloud solutions. As I think this demonstrates, we should avoid falling into US-style deregulation here, which is not a model that provides a lot of policy predictability or coherence. And instead, we should be making sure that our own regulatory rules are sensible, enduring, well-designed, and, this is particularly important now, properly enforced. Technology is only useful to Europe if it meets our economic and social needs, and regulation has an important role to play in building that trust. Thirdly, in some cases, we do want to support the operation and growth of European businesses through targeted intervention.
And as I said, we can do this most effectively with trustworthy partners rather than doing everything ourselves. And if we do want to support local options, they do not have to be fully fledged right away. In some cases, a basic minimum viable product could give European customers the ability to switch to a local alternative as a backup if it ever became necessary. So, generally, I think the best way to align competitiveness and sovereignty is to work out where we have comparative advantages and invest the most money into those sectors where our companies can maintain global technological leadership and control choke points. We don't need to worry so much about being dependent on others if they are also dependent on us.
So, as I've said, this means being targeted and strategic, particularly if the Commission's European Competitiveness Fund goes ahead. We know from academic literature that industrial policy has to be well-designed and strategic, and that not every sector or every firm in Europe can expect to be a winner if we want this strategy to succeed. Of course, every member state will argue that its industries are the most strategic. Many firms will argue that their businesses are the most deserving of funding. But if we want industrial policy to succeed, we can't just listen to firms or sectors that have the loudest voices today.
We need industrial policy to be informed by commercial and technical expertise and to be insulated from corporate lobbying. And this is where parliament's role and parliamentarians' role are so important, especially since the commission in Europe wants to retain such large discretion over the allocation of competitiveness funds. The parliament needs to fight to play a critical role in holding the commission to account, producing impact assessments, and ensuring that trade-offs are recognized and transparently grappled with. Thank you.
Costas Mavrides
Very well. Mister Myers, thank you. Let's move on to the third guest, Mr. Butters.
Speaker 9
Thank you very much, Cochas. So, yeah, I'm Ben Butters. I'm the Chief Executive Officer of the European Association of Chambers of Commerce and Industry. Chambers of Commerce: I'm sure many of you are familiar with them. There's a network of around 2,000 of them across Europe.
Their main constituents are small and medium-sized enterprises. There's been a lot of talk in recent weeks about competitiveness. We had the EU Leaders Retreat, as the Co-Chairs mentioned in their introductory remarks, in Alden Biesen on February 12. We were, to begin with, quite concerned by the input provided for that EU leaders' retreat by President Vandelion, which seemed to be basically saying that we're doing all the right things and we're just going to keep doing them. And there's an expression in English.
If you keep doing what you've always done, you'll always get what you've always got. And clearly, it is not a recipe for reform and for improving our economy and our competitiveness. But nonetheless, the outcome from that retreat, even if vague and informal, is encouraging. Some of the discussions to us imply that there is a mood to reform and an ambition to try new things. Notably, there seems to have been a strong discussion about the notion of a two-speed Europe.
In other words, coalitions of the willing are pursuing efforts to integrate in areas where others may be a little more cautious. That could be an interesting way to proceed. We've seen that in relation to the Schengen area and the euro, as well as on smaller dossiers like the unitary patents in the past. And perhaps that's the way we need to go. We're not able to take the measures and implement the reforms that we need to become more competitive.
Specifically on the point of technological sovereignty, which was mentioned in the topics to discuss. We clearly understand that technological sovereignty is important, but we shouldn't pursue sovereignty-driven legislative proposals at the risk of our economic functionality. We need to ensure that we prioritize economic functionality over strategic priorities. Otherwise, we risk deeply damaging European businesses. We have great concerns about the recently published revision of the Cybersecurity Act in this regard, which includes provisions that could amount to far-reaching prohibitions on the procurement and imports of ICT goods from non-EU suppliers, which sounds like a way of stimulating EU suppliers.
But if they're not there in time and they're not affordable, it will severely disrupt the business model of European companies, their supply chains, raise costs across the economy, and ultimately weaken rather than strengthen Europe's competitive position. So, we need to get things in the right order. We already saw with the Green Deal the damage that we can do by regulating first and then thinking about the consequences afterward. And we shouldn't make the same mistakes when it comes to technological sovereignty. And for us, and it's a point that was mentioned by the co-chairs in their remarks, to achieve this, the priority must be to build credible European alternatives at scale, and that involves deeper single market integration, a genuine savings and investment union, better startup and scale-up conditions, and targeted public investment in computer infrastructure and skills.
That sovereignty is achieved by building European capacity, not by restricting what businesses can use. That's a very important point for us. And that builds into my final point, which is all about the single market. The single market is critical to us. We've spoken a lot, as Chambers of Commerce and Industry, in recent months about the simplification agenda, which is also extremely important.
We need to ensure that the stockpile of European legislation is fit for purpose and that new legislation is developed in a measured and proportionate manner. But in addition to that, the integration of the single market is key to us. We've seen over the weekend the Supreme Court ruling in the U.S. S. And President Trump's knee-jerk reaction to that ruling.
And I think that really demonstrates that we need to control what we can. And that means focusing on single market integration. And by reducing barriers in relation to goods, and in particular services, the benefits of getting rid of those barriers would far outweigh the damage that US tariffs are imposing on us. So let's make sure that over the next years and up until 2028, we really focus on tackling those stubborn, persistent single market barriers, which are preventing SMEs from across Europe from benefiting from the opportunities that the single market provides for them. For us, the narrative in recent years has been about the cost of non-Europe.
For us now, the narrative should be about the cost of a non-competitive Europe. Thank you very much.
Costas Mavrides
Thank you, Mr. Batas. Now let's move on to the open discussion with the parliamentarians, starting first with Mr. Pascalides from Greece. Where is Mr. Pascalides? Mister Pascalides, you have the floor for two, no more than three minutes.
Thank you.
Speaker 11
You, Chairman. Ladies and gentlemen, officials of the European Union, my dear colleagues, MPs, dear speakers, the debate on increasing our technological sovereignty and the growth of the economy in Europe is strategic and is connected to the future of Europe. Today, the European Union is at a crucial crossroads. On one side, it is facing very strong international competition in areas such as artificial intelligence, semiconductors, clean technologies, and data. On the other hand, Europe has to maintain its high standards and achieve digital transition without losing its industrial base and social cohesion.
Technological sovereignty means, first of all, the capability to develop our own infrastructure, our own platforms, and our own innovations. It means investments in research, in data, in the skills of our people, and also in strong innovative ecosystems that connect the state with the universities and with the companies. And the competitiveness of the European economy goes through the reduction of red tape, supporting the SMEs either through increased accessibility to financial instruments or through the implementation of control criteria in order to avoid illegal competition. And we need tools to promote private and public investments in strategic infrastructure and critical raw materials. So, we don't want Europe to follow global developments; Europe should shape the developments through cooperation, investments, and a common joint strategy. We can ensure a Europe that is technologically strong, economically competitive, and socially cohesive.
Speaker 10
Dear colleagues, I will speak in my language. I.
I do believe that the strength of the Union lies in the member states' capacity to reach their maximum individual potential. EU means cohesion and solidarity, and I will make four statements, four statements meant to be questions. The first statement relates to the performance of labor here in the EU. We need to keep in mind what we are doing in terms of labor. In Romania, the labor force is competitive, highly qualified, and highly skilled.
But given the priorities going forward, we need to consider how we will prepare the labor force to a European level. Only through good labor and more intensive work will we achieve our goals. Now, research and innovation are pillars of sustainability in the EU. We need high added-value products that are on the global market. Romania has really good quality technology schools.
So, the EU, we have to advance more technology schools. We need to further strengthen occupational schools and vocational schools. We need to focus on vocational schools if we want to cope with the coming high technology. We cannot talk about a strong economy without capital. Capital needs to be integrated across the EU.
We do need a joint strategy, and the main objective here is to lower the EU's trade deficit. Each member state should contribute to lowering this deficit in the areas where they have the highest level of competence. So, we need cohesion here across the EU. Now, dependence on raw materials; so, this is my fourth statement. We have a big issue here.
Raw materials are owned by each member state, and Romania is no exception here. We simply need funds to tap into this potential. The EU can stay competitive if it invests in people, innovation, and cohesion. And together, we will make it. Don't forget, however, that the train has already left the station and we need to make up for lost time.
Thank you.
Costas Mavrides
Thank you, Mr. Larvison. I will turn now to myself. I will speak as an MEP on behalf of S&D. I'm not going to argue with what has already been said, but I'm going to concentrate on one specific vision and one specific policy, which is incomplete, just to show that sometimes we talk a lot, but when it comes to concrete policies, we don't deliver. At the core of the European project is the essence of real convergence: real economic convergence.
So, in that sense, we need to take care of all parts of the EU, from islands to territories, from peripheries to the mainlands. And having that in mind, at one point, we are in favor of, for example, the mobility right. At the same time, everyone has to have the right to stay in their own home. That's not easy to compromise unless we have, as has already been pointed out, real cohesion and real growth all over Europe. Now, the point where policies differentiate: we all talk about the capital market union, for example, especially the banking union, but the banking union is still incomplete.
How can we talk about the single market and capital market union, and not complete the banking union? The third pillar is that we need to have EDIS, the European Deposit Insurance Scheme. And let's make it simple. Without that, the competition within banking sectors in the EU is unfair because the burden of guaranteed deposits falls on each member state in essence. So, to make it fairer, and by the way, we will talk about the Draghi report.
Draghi, when he was the chair of the European Central Bank, was very clear on his positions regarding EDIS and the completion of the banking union, as was even Madam Lagarde. But we are still here because of political differences. With that, I think somehow we need to converge on our real vision and real convergence for all of Europe. And that's what I had to say. I'm going to co-chair.
Okay. The floor now is given to Mr. Giulio Terzidi Santa Gata. Yes.
Speaker 12
Thank you very much, Chair. Now, I'm very receptive to this call for us to try and find some convergence among all the colleagues in the room from the national parliament. And I would hope that these points of convergence include the idea that sovereignty and technology have to be a genuine strategic priority for the Union. We need to guarantee the resilience of our supply chains for critical materials, semiconductors, and advanced materials. It's important that we keep a close eye on the supply chains that we can manage to ensure self-sufficiency for all of the member states of the union.
That should allow the EU to have a positive effect on our partners beyond the candidate countries and neighborhood partners. For that, we'll need much more integration to have safe value chains for quantum computing, artificial intelligence, and critical raw materials. We need a strategic view of the supply chain because, otherwise, there are vulnerabilities for the EU. In many cases, there are issues involving dependence on third countries that could replace current dependencies. So, we need to be careful with critical raw materials, but we also need to avoid dependence on high-risk suppliers.
I'm thinking primarily of China, which is a strategic competitor and a systemic rival. Then, we also need standards and better practices for the technological governance and regulation of artificial intelligence. Then, we also need control of predatory technologies that are controlled or supervised by enemy regimes. In our trade policy, we need to look at which countries, how they are governed, and how much we can trust them, not only from a trade and business point of view, but also from a security point of view and in terms of the rule of law, which is something that we need to spread and promote, as stated in Article 2 of the Treaty on European Union. We need an assertive European approach.
We need to defend Euro-Atlantic values and interests. And we need common responses to common threats. And to conclude, two final points. I think it's important that we accelerate our work on the single currency package. The digital euro is not just a great idea, but it is a great piece of work being done across the European Union under the leadership of the European Central Bank.
It already has major prospects for the global relationship between the EU and the rest of the world. Furthermore, I wanted to stress the importance of the Quantum Act. Experts in the area are telling us that this is a field of new technologies. Well, this is something that's being said in Brussels as well, I assume, not just in capitals, but quantum computing is an area where we have a real perspective for the future, both in terms of research and application of existing technologies, and also in trying to fill the gaps out there that we need to be at the forefront of filling. Thanks.
Costas Mavrides
Thank you very much. And I give the floor to Mr. Giulia Sbereni is from Hungary.
Thank you.
Speaker 14
Thank you very much, Mr. Chair, dear colleagues, MPs, and MEPs. Hungary agrees with the competitiveness challenges identified in the Draghi report. The implementation of the measures in the 2024 report is still lacking. It is very important to reinforce competitiveness.
Speaker 15
In order to do this, it is very important that the Cyprus presidency continues working towards the competitiveness objectives formulated in the Budapest declaration. This has to be the primary approach in order to build a regulatory environment that is flexible and quick in its reactions. We can improve competitiveness at a higher rate if we focus on faster and simpler administration, licensing, and foreseeable measures in regulating the energy sector, for instance. We should review the de minimis rules because flexible state aid is made difficult by the low threshold established in this sector of regulation. And this means a competitive disadvantage compared to other regions.
Thank you very much.
Costas Mavrides
Thank you very much. Before giving the floor to Mr., Pierre Pimpi, I would like to ask all the participants to please keep your addresses to a two-minute maximum in length, as this topic has attracted a lot of interest, and that is very encouraging. However, we only have a limited time. So please keep your addresses to a maximum of two minutes.
Dear,
Pierre Pimpie
Colleagues, we wish to strengthen our sovereignty, our competitiveness, and our growth. But we see many contradictions. How can our industry be competitive? How can we invest in innovation? If you are weighing them down with nonprofitable regulations, say in France, we have nuclear energy.
The Germans, however, have looked to scupper nuclear energy in Germany itself and elsewhere. China has far cheaper energy. You want to see wind power in electric cars. Yet, we know that some companies have posted losses because they believed in your lobbying. The European Union seems to prefer lead to gold. You're increasing customs duties.
We're seeing that elsewhere, and the European Union seems to be sacrificing its farm sector, believing that it can place all emphasis on the German industry. What about sovereignty when it comes to defense? There are so many examples that undercut what you are saying. What about the 80,000,000,000 or more earmarked for Ukraine that will be used to buy weapons that aren't even made in Europe? Sovereignty isn't just a slogan. It is a show of strength, a mindset.
We need to be sovereign in all sectors. If we cannot be, we will never be fully sovereign. We need to move beyond all these contradictions. Thank you.
Costas Mavrides
Thank you very much. I now give the floor to Mr. Caspars Briskins from Latvia.
Speaker 17
Greetings, colleagues. Thank you for this opportunity. And on behalf of Latvia, I can reinforce that the package for Ukraine needs to be adopted as soon as possible. And the only contradiction is that it has not been done yet. A short perspective from Latvia regarding European industrial policy.
So there are three pillars, in my view, but also, of course, building on Draghi's reports, which have laid the groundwork for mission-oriented industrial policy in Europe. Defense and European self-sustainability is an obvious priority, and here we need diversified supply chains. Patria, the Finnish company, already has an assembly operation in Latvia. Latvia is procuring Saab, a Swedish air defense system. Rheinmetall has announced its investment in the Baltic States.
So, these are good examples of how we can expand defense and supply chains across the continent. Military mobility is absolutely crucial for the Baltic States, not least in the context of the Rail Baltica project. The second pillar is, of course, the closing of the innovation gap and the achievement of technological sovereignty. Another key conclusion of the Draghi report underpins the new competitiveness compass. Artificial intelligence, then robotics—the next step of that iteration—then quantum computing, and ultimately, quantum robotics.
The European Union needs to be ready and also keep a very keen eye on cybersecurity elements related to the emergence and continued deployment of these crucial, game-changing technologies. And the third pillar, of course, is the green transition and continued investment in green technologies. There's no better time for Europe to reassume its global leadership in climate technologies than today. So, I support strict green spending targets also in the next multi-annual financial framework. I also commend the clean industrial deal, with its ample investment in these areas.
Also, the ensuing Circular Economy Act and the Industrial Accelerator Act, which will hopefully be unveiled next week, will promote industrial decarbonization. So, it is very important, also in the context of the multi-annual financial framework, that all these three key pillars—defense, innovation, and green transition—are fully safeguarded. Thank you.
Costas Mavrides
Thank you very much. I give now the floor to Miss Sandra Dexter from Germany.
Speaker 18
Thank you so much, Mrs. Chair. I'm Sandra from the Green Party in Germany. I have 3 points to make. First, I think you mentioned the difficult geopolitical situation. And the answer should really be a strong Europe united because none of our member states is strong enough to face the challenges that we have in this environment.
That should be clear for all parliaments in this room and for all the executive branches. And I really do not understand why some people still go to China or the US to negotiate their own deals. At least I criticize my government for doing so because we really need a united Europe. Second point I want to make: I think the European Commission is really doing a good job, and also part of the European Parliament, in balancing the competitiveness with the resilience agenda. It is indeed difficult to balance things sometimes.
But let me mention the way towards economic security with these three pillars: promote, protect, and partner. And, Mister Butters, I really live in a country that has put a lot of effort into efficiency during the last decades. And the heavy dependency on Russian gas was nice for competitiveness, but it caused us huge problems. So it's really necessary to balance the two topics, and I would love to see Europe go further ahead this past year. The third topic I want to discuss is using clean technology as a driver for economic growth because it combines both climate protection and economic growth and can contribute to integrative growth in Europe.
Thank you so much.
Costas Mavrides
Thank you very much. I now give the floor to Mr. Pasquale Trudeco.
Pasquale Tridico
Thank you very much, Madam Chair. Now the European Commission is linking the concept of competitiveness with simplification. And we should, however, call it, in the true way, simplification. It is more something like deregulation, something we already saw during the 1980s. But actually, we didn't see the result of competitiveness at that time.
We speak about cutting costs for bureaucracy, but this very often means the devaluation of labor rights rather than real competitiveness. Think about what we have done with defense. When we wanted to cover the gap with the rest of the world in terms of competitiveness of defense, what did we do? We decide to invest billions of euros of public funds in defense. So, we understood what we actually need in order to be competitive in one strategic sector.
Now, we want to understand that to recover competitiveness in our industrial sector, we need strategic autonomy, public investment, and public resources. In fact, we proposed, for instance, the model of SURE as the real model to push competitiveness because it would help the transition towards the ecological sustainability of production. It would support labor as a form of income. It would also support small and medium enterprises, which actually suffer from the unfair competition that we face in Europe. There is one cost, which is the cost of fragmentation within Europe.
It's the cost of different systems. Yes. But, actually, it is a loyal competition within Europe, even with some form of tax haven within the European Union. So, in order to be competitive, we need to recover strategic autonomy. The message and the fundamental argument of the digital euro that we are bringing about is very important: to recover competitiveness and to recover strategic autonomy as a form of public investment in order to boost competitiveness.
We cannot rely on simplification or regulation to recover competitiveness.
Costas Mavrides
Thank you very much. And I now give the floor to Mr. Jose Maria Sanchez is from Spain.
Thank you.
Speaker 20
You, chair. I listened to Mister Butters, who fortunately said that it wouldn't be a mistake, that the Green Deal wouldn't be a mistake. The Green Deal will prove its effects. You are completely right in this matter. But I also need to say that, on this subject, we need to talk about protectionism.
This is a negative point for the European economy, as it carries out a certain type of protectionism. The term of openness is very consistent. It's done in a way without intellectual value that has consequences. This debate about why there is protectionism in Europe is something that we also see with President Trump. I've already talked about this in the Supreme Court.
Speaker 20
In the end, we need to understand that Donald Trump's protectionism protects the American economy, and this can damage Europe. It's not just with respect to the United States. It also affects third states and third countries. So, does protectionism affect all of us and then bring us into this dogma that the free market is always better than protectionism because it doesn't allow any other reason? We've also mentioned, in the background notes, the European Competitiveness Fund, the ECF.
There's over 400,000,000. What does this quantity mean? Is this a fusion of different categories of programs? Or is it something else? Because we need to know up to what point this fund is a new debt.
Speaker 20
To conclude, there's still the question about productive investment. Nothing has been said about this and its relation to interest rates, so that we don't fall into an issue because of it.
Costas Mavrides
Thank you very much. I now give the floor to Mr. Ricardo Carlos is from Portugal.
Thank you.
Speaker 22
Thank you very much, chairs, members. Well, there is a lot of competition around the world. There's geopolitical instability. So Europe makes a clear choice. Either it reinforces its capacity to act strategically, or it will lose economic influence, political autonomy, and internal cohesion.
Technological sovereignty is not an abstract term. It's a concrete capacity for Europe to control critical technologies, protect its strategic interests, and guarantee its economic resilience. We need to think about semiconductors, AI, cybersecurity, and clean technologies. Otherwise, we will be exposing ourselves to political and economic risks that we cannot withstand. Technological sovereignty is a precondition for preserving our capacity to make decisions in the EU and our credibility.
Now, if you look at the competitiveness documents for 2024, you can see the difference between the US and EU growth. And you can see that if we are to try and overcome this growth gap, we need €7 to €800 billion a year. Innovation policies and the capital markets need to be worked on; the regulatory system, in particular, needs to be improved. We also need to ensure that this competitiveness compass actually takes shape, and that's the European Competitiveness Fund that will allow it. This will only be sustainable if we have inclusive growth and territorial inclusion.
We cannot forget the small and medium-sized companies, the less developed regions, and, equally important, the outermost regions. I've got two questions for Colos. Are we really prepared to align our national policy with the European competitiveness strategy? This will require demanding political choices without compromising territorial or social cohesion. Is the European bureaucratic structure ready to do this, as well as its institutions?
Thank you.
Nikos Papandreou
Thank you, Chair. Welcome, Mr. Mavriviz. What the members from Spain and Portugal said is exactly what we're talking about in the parliament. So, you're in the right ballpark. With technological sovereignty, that was not an issue until maybe 5 years ago when we really brought it up as a European issue.
So, this is new for many reasons, as you know. Not.
Nikos Papandreou
Go into the whole discussion. I am the shadow repertoire, as we call it, for the digital euro, which is an effort to have sovereign pay systems. Just to give an example of why we need that, I give exaggerated examples, but let me give one that is not so exaggerated anymore. If Greenland does not give, if Denmark does not give Greenland to Trump, which they won't, for fun, Trump can say to Visa and Mastercard, "Shut down Denmark for a month." It's not so extreme since he shut it down for the ICC judges and during the war in Russia. So, these are not extreme things.
Right now, even the European card systems, which exist in Germany and France, have to go through the POS, the little machines that we have, which use software from Visa. So, we have to pay Visa for the small space to use the European one. So, when we talk about sovereignty, it is not just the payment system. It's the cloud, which we know Europe is developing. It's the POS system.
It's the chips, which were mentioned by the Portuguese colleague. Very difficult one. As far as we can go. So, Europe is trying to progress in terms of bureaucracy; everybody is aware of that. And the question is: can we oblige the member states to join the effort, at least for me, to make a more federal Europe?
Thank you.
Costas Mavrides
Thank you, Mister Andreud. I now give the floor to Mr. Philip Rotwilm from Germany.
Speaker 24
Dear colleagues, Philip Rotwilm, Germany, Social Democrats. I want to raise a topic that Christiana Eretogrito touched upon, which is a debate that we are currently having in Germany as well. One of the central questions is how to help European startups scale into serious players. And if we succeed in building such companies, we will also make progress on the technological sovereignty that we're talking about, become more competitive, and also strengthen our long-term sustainable growth. What we find is that we have strong research, excellent founders, and we are doing relatively well in the startup sector, but we are failing when it comes to scaling them up.
And those companies need large-scale institutional capital, starting from, let me say, serious B, easier access to the entire European market—we just talked about this—and finally, stronger demand for IPOs, which should, by the way, not just happen in the U.S. S, but in the European Union. And some of these issues can be tackled by the use of capital that is already sitting there, waiting to be invested, especially in Germany. It is our pension system, which we need to enable to invest in the capital markets, by the way. That is one of the biggest topics we are debating in Germany right now.
We will reform the pension system this year, hopefully with precisely that objective in mind. I wanted to raise this because I know that there are other member states who have similar problems and are facing that debate, not only on a European basis, but in the member states within our national parliaments as well. I think that if we tackle these issues and focus on that in 2026, we can overcome those structural bottlenecks, and that will be something that we can all share together. Thanks, happy to be here.
Costas Mavrides
Thank you very much. I now give the floor to Mr. Tom Weiding from Luxembourg. What?
Speaker 25
Should the EU and its politicians do more for Europe to regain competitiveness and technological independence? My political party wants a different narrative. The EU politicians should not do more. They should do less. We, politicians, should not impose our solutions on the people and their companies, but help them find their own solutions.
We should work hard to ensure a functioning economy, which unleashes the creative power of the people and their companies, and not put them in a straitjacket where they cannot do what is best. Therefore, we support the initiative to do less, namely the omnibus packages. Cutting regulation in a sensible way reduces costs and makes the industry more flexible. But this is not enough for us to thrive economically. We need to stop the cultural battles that currently destabilize our societies in Europe.
Common sense dictates that we need a reasonable migration policy based on working visas, and not uncontrolled mass migration straining social welfare. We need a rational energy policy and not an ideological ban on, for example, nuclear energy, or a blind trust in renewables when it doesn't make sense. That only makes us more dependent on Russia and increases, for example, the CO2 output of Germany. We need realistic environmental laws, not a Green Deal that costs a lot but has little impact on the environment and sometimes even negative effects. Even though my party is skeptical of an ever-closer union, we can focus on more economic integration, such as a digital single common market or a unified capital market.
But most of all, we need to inspire young entrepreneurs. But that will not come from an EU directive, but from the young minds themselves when we support them, and not when we constrain them with more laws, regulations, and ideology. Thank you.
Costas Mavrides
Thank you very much. I now give the floor to Ms. Rina Sikud is from Estonia.
Speaker 26
Thank you, dear colleagues. The increase in defense spending pretty much reflects the member states' distance from Moscow. But we have to admit that all Member States are debating the increase and the types of investments needed in defense and security. Thus, we should make sure that the increased defense spending is also an instrument of European integration, not an instrument that widens the divides in Europe. So joint procurement, simplification of procurement, joint defense planning, and military purchases from EU companies, particularly in priority areas, this is the way we should go.
Speaker 27
For example, Estonia spends almost 5.4% of its GDP on defense this year, and most of it is sent abroad. But we can achieve innovation, improve competitiveness, and increase growth when defense spending is coordinated and spent in a well-designed way. We are in a hurry with the coordination and design of the spending. And secondly, about digital sovereignty. The focus should be on critical national digital infrastructure and services, but not on restricting all businesses and citizens.
Speaker 26
In addition to sovereignty, we should emphasize that the European track is the unique way digital tools are not for surveillance and control or for using data to manipulate consumers or restrict freedoms, but for ensuring human rights. The person should control their own data. So, it's not just about sovereignty, but about continuing the European way of life. Thank you.
Costas Mavrides
Thank you very much. I now give the floor to Mr. Rafael Komarevich.
Speaker 28
Ladies and gentlemen, thank you for giving me the floor. The need to increase Europe's competitiveness is a fact, and it calls for action. One area is the digital sovereignty of the EU. It doesn't mean that we have to be in isolation, but we have to decide on the key technologies in Europe in the areas of designing, implementing, and scaling up. And we need the guarantee of security, access to data, and cloud services.
Speaker 29
For many years, we have seen that the digital world has been used to destabilize our democracies through hacker attacks and attacks against our key infrastructure. Europe does not have sovereignty at a good level. We need to change the scale. We need to change the methods of support for the Europeans, including Polish technologies. Only the efforts of all member states can bring us security.
Speaker 28
We believe that joining the Berlin Declaration will increase cooperation in this area. Of course, we do not exclude cooperation with other players like the USA or Asian countries. We also, in Poland, develop our cooperation with Japan and Singapore. We also place great importance on artificial intelligence. We are looking at its development.
We don't want the European Union to be behind other operators, and it is very important that we make good choices. Thank you.
Thank you.
Speaker 30
Thank you very much. Well, Europe needs to be able to control its strategic infrastructure, data, semiconductors, AI, etc., but we're falling far behind the US on AI and investment in a lot of these issues. It's very difficult for us to create something similar in the European Union. However, let's not underplay ourselves. We have to work hard on critical materials.
We need to concentrate on the green and circular economy, and energy efficiency. We need a genuine industrial plan that does not create competition between member states. We need to ensure that we have growth, but growth has to go hand in hand with the ecological and digital transitions. Well, we've heard the comment that the single market is the basis. And yes, that's correct.
We need to support small and medium-sized companies, and not just multinationals, as is all too often the case today. Investment in Europe needs to go into AI, digital, and development, but not for arms, certainly not. We need to try to ensure that we redirect our spending. We certainly should not be sending more money into defense. Multiplying defense expenditure is not the best strategy.
It's always less than 1. So, it is not what we need at this moment. We've heard about the cost of non-Europe. And in fiscal terms, we still have too many differences between tax havens, and that is going to prevent us from growing in a harmonized and unified manner.
Costas Mavrides
Thank you. And I now give the floor to Mr. Erian Malads from Albania.
Speaker 31
Thank you, honorable members. As a representative of the Albanian Parliament, I speak from the perspective of a candidate country whose prosperity is inseparable from Europe's competitiveness. Technological sovereignty must not be misunderstood as technological isolation. Europe's strength has always been its openness, its single market, and its regulatory credibility. The real vulnerability is not interdependence.
It is overdependence without resilience; strategic dependencies that threaten security, critical infrastructure, and innovation capacity justify targeted public intervention. Others can and should be addressed through diversification, trade, and competition. Closing the productivity gap requires scale, capital, and speed. This is why completing the single market, especially in services and digital, is not a technical exercise but an economic necessity. Europe cannot compete by diluting the very environmental and social model that defines its global leadership.
Competitiveness and sustainability are not rivals. They are co-drivers of long-term growth. The proposed European Competitiveness Fund must learn from past lessons, have clear priorities, measurable outcomes, strict conditionality, and transparency. Finally, national parliaments have a dual responsibility: to ensure democratic oversight and to resist the temptation of delays or politicization of reforms. Legitimacy and agility must go hand in hand.
Speaker 32
For countries like Albania, Europe's competitiveness is not an abstract Brussels debate. It is the horizon of convergence, stability, and shared growth. Thank you.
Costas Mavrides
Thank you very much. And now, I give the floor to our panelists for their concluding remarks and responses to the questions raised during the debate. And I would request, please, if you could confine yourselves to two minutes each because we're running out of time. Thank you.
Speaker 4
Well, thank you very much. It's, of course, impossible to respond to everything, but let me highlight two or three points. I think the first point I want to highlight is that there seems to be broad agreement on the importance of market integration. And, of course, with market integration, there has to come strict enforcement of competition policy. And sometimes, I'm a little bit worried that we are sort of turning blind to the more competitive side in order to boost specific champions.
We need to make sure that we have competition. Only with competition will you have the benefits of growth coming from market integration. The second point I want to highlight is that there's a big discussion on the role of regulation and whether we have too much or too little. My take on this, having been in Brussels since 2008, is that European regulation, if it applies to the entire single market, should not differentiate by having national enforcement directives that give lots of scope for member states to implement it more or less strictly. So, the more we have a single set of regulations that apply to everyone in the market, the more this is conducive to really creating a single market, therefore getting the scale.
I mean GDPR, for example, our data protection legislation suffers from the fact that there are national enforcement agencies that are very different and implement it very differently. That is a hindrance to the digital market. So let's think about how we regulate in a way that is really European, and that means, of course, that some member states, many member states actually have to swallow the bitter pill of losing some control over some aspects of regulation. So that's, I think, a very important European regulation as a single market driver. And the last, very quick point on the defense multiplier: I disagree that it's so small.
I mean, it is small in the short term, but there is new research published in top American economics journals, such as the American Economic Review, showing that there are long-term positive supply effects because of technological breakthroughs. So let's not underplay that if we spend on defense now, it can have long-term positive growth effects, in particular if we spend on European high-tech defense.
Speaker 7
I think this was a really rich discussion, and I'm sorry I won't be able to comment on all the points raised. I am heartened by the importance that so many representatives have given to digital sovereignty. And I want to reiterate, as I said at the start, that there are two ways of thinking about this problem. One is focused on defensiveness and on removing our dependencies. And this inevitably involves some trade-off between productivity and growth because, essentially, what we're trying to do is replicate services, products, and markets that exist overseas.
Defensiveness is an important part of the puzzle if it's targeted and realistic, and it focuses on areas like payments and some types of cloud computing where our dependencies are the most severe. But we should give more emphasis to an offensive approach to industrial policy, and this means choosing points where we can be indispensable to our trading partners, rather than just trying to lead in everything. And indispensability is why China has been able to stand up to the US, for example. Building tech leadership in some choke points means that we will not be able to be held to ransom, and not only that, but we will have globally successful firms that boost European wealth and competitiveness. This tech leadership won't just come from artificial support for European firms, whether that's through subsidies or by European initiatives.
But I think, as the Albanian representative said, this comes from staying open because the trade intensiveness of our economy is what is so important to European growth. It also means mobilizing risk-oriented capital and delivering a working single market so that the most promising firms in Europe can scale. And all of this has, of course, been said in the letter report and the Draghi report. So I think what I would really like to focus on, as a parting question, is that we know what we need to do. How are we going to get the political courage to actually deliver it?
Thank you very much. Mr. Bottas?
Speaker 9
Thank you. Firstly, on the issue of sovereignty, I'm British and sovereignty was a topic of some discussion in 2016 in my country of origin and a bit of an obsession, actually. And I guess my message is yes to sovereignty, but let's not kid ourselves that sovereignty is possible in every manner, and we should also consider resilience and interdependence. We don't live in isolation. Even collectively, the EU is just 7% or 8% of the world economy.
So, we need to remember that we're part of a joined-up global order, even if that global order is under some pressure at the moment, let's say. And sovereignty, of course, we support approaches towards sovereignty in critical sectors, but we need to ask some questions. Does a given restriction actually reduce a strategic dependency, or does it simply raise costs and create barriers without producing a credible European alternative? If we go down that route, we will be in trouble economically. My second point is about the issue of simplification.
I think I was wrongly quoted by a Spanish member of parliament who subsequently left, saying that I said the Green Deal was a mistake. I definitely didn't say that the Green Deal was a mistake. But there were elements within the Green Deal that we believe were poorly drafted, prepared, and not thoroughly analyzed. So, there were mistakes within the Green Deal. And let me just give one quick example, if I have time.
We've been approached by a company that manufactures nails, the things you use to keep pieces of wood joined together. Nails are not within the scope of the carbon border adjustment mechanism, which has been put in place as part of the European sustainability agenda. But the raw materials that you need to produce nails are within the scope of the carbon border adjustment mechanism, which means that this nail manufacturer, which employs 200 people in the Czech Republic, has seen his raw materials become exponentially more expensive. Meanwhile, his nail-producing competitors from outside the EU can still import nails that are not part of the scope without any such additional levies. So, it's not a level playing field.
We need to look into those unintended consequences of EU regulations, whether in relation to sustainability, digital, or other areas, and be very careful about those implications before we proceed.
Costas Mavrides
Thank you very much. Now, as we conclude this session, allow me to share a few final thoughts. Today's debate has confirmed a shared understanding that Europe's competitiveness is a matter of urgency as well as a matter of economic security, strategic autonomy, and social cohesion. Technological sovereignty, deeper capital markets, and a fully functioning single market are powerful pillars in our long-term prosperity and in our effort to achieve it. Fragmentation, underinvestment, and persistent dependencies continue to weigh on our growth potential.
The real question is no longer what needs to be done, but how fast and how decisively we are prepared to act. Delivery will require political courage and coordinated action at the European and national levels. And it will require that we translate the next MFF and the proposed competitiveness instruments into tangible opportunities for businesses, innovators, and citizens. In this regard, national parliaments and the European Parliament share the responsibility to ensure democratic legitimacy, monitor implementation, and maintain momentum. With these thoughts, I warmly thank our speakers, my co-chair, and all of you for this substantive exchange.
I look forward to continuing our cooperation in order to deliver concrete results for Europe's economy and its citizens. Thank you.
I would also like to thank all the speakers and the members for this insightful and interesting discussion. Additionally, I would like to thank my co-chair, Christiana Erodo Cridu, for co-chairing this meeting. This discussion shows that the national parliaments and the European Parliament are actively participating in the competitiveness agenda despite our different views, with the national parliaments playing a crucial role in ensuring the democratic legitimacy of competitiveness policies. I now invite you all to join us and participate in the second session of today's INCON interparliamentary committee meeting, focusing on the Savings and Investments Union. I think we are on time.
Alright.
I think.
Costas Mavrides
Let's take a five-minute break. Just five minutes. In 5 minutes sharp, we start.
Costas Mavrides
Please be seated. We should start. Five minutes are over. Just like Boy Scouts and gay scouts, too. Dear colleagues, please be seated.
Have a seat, please. Dear colleagues, welcome to the second session of the interparliamentary committee meeting dedicated to the very topical issue of the savings and investments union: challenges and next steps. Europe must secure its own economic future and find additional funding sources to make the EU economy grow. The development of a savings and investments union is a crucial priority in this respect. We need to focus on strengthening the EU's financial system by removing internal market barriers and improving the system of channeling savings into productive investments.
And we must do it with a sense of urgency. As the previous discussion showed, unlocking the vast potential of the EU for improving financial opportunities for people and businesses is also a matter of collective security and of enhancing our open strategic autonomy. We need deeper, more integrated, and more efficient capital markets that channel private capital towards European priorities while ensuring stability, transparency, and investor protection. However, the experience so far has shown the presence of entrenched obstacles that slow down financial integration. Structural and political barriers, including national prerogatives, remain and continue to influence the pace of capital market integration. The European Parliament plays a key role in the development of a savings and investments union.
Through our legislative and scrutiny functions, we contribute to shaping the much-needed reforms, anchoring them in democratic debate, and ensuring accountability at the European level. National parliaments also hold a crucial role by ensuring democratic legitimacy, scrutinizing the national implementation of EU measures, and fostering local participation in member states. The private sector, civil society, and various national authorities have further contributed many ideas on how to make the Savings and Investments Union a success. Today's debate will offer an opportunity to exchange views on the way forward and address many pertinent questions, such as what could be the role of national parliaments in supporting initiatives in the area of financial integration so that convergence between national practices and European ambitions is achieved? What obstacles should be addressed to ensure that the SIU meets its objectives?
Which elements of the newly presented market integration and supervision package are more critical for delivering on those? With this, I would like to give the floor again to my co-chair, dear friend, Cristiana Rodogrito. Thank you, dear Costas. Dear colleagues, allow me to frame our discussion by situating the Savings and Investment Union within the broader political and economic moment Europe is facing. The Savings and Investment Union is the European Commission's flagship strategy to complete what we began with the Capital Markets Union and to move beyond a fragmented approach to banking and capital markets.
It reflects a clear recognition that Europe possesses abundant savings, yet too often, these savings do not find their way into productive European investment. Bridging that gap is more urgent than ever. In March 2025, the European Commission set out its vision for the Savings and Investments Union to remove internal market barriers, strengthen competitiveness, and create a more efficient system for channeling savings into investment. The guiding principles—efficiency, simplification, burden reduction, and digitalization—are positive aspects. But they also raise important political questions.
How do we strike the right balance between harmonization and respect for national legal traditions, particularly in areas such as insolvency, corporate, and tax law? The December 2025 market integration and supervision package represents a decisive step. Its ambition is to reduce fragmentation in trading, post-trading, and asset management to facilitate cross-border transactions and to streamline supervision, potentially through a more centralized mechanism, which goes to the heart of market integration. At the same time, this is precisely where trade-offs will emerge between efficiency and subsidiarity, between national supervisory prerogatives and European oversight. If we wish to overcome our vulnerabilities, we must be honest.
The limited progress achieved under the Capital Markets Union shows that technical proposals alone do not overcome political resistance. Long-term preferences for bank-based financing, divergent national insolvency regimes, taxation differences, and concerns about risk sharing have slowed integration for years. If the savings and investments union is to succeed, it must confront these realities with political resolve to find compromises that are win-win for all. The reports about Mario Draghi, Enrico Letta, and Christian Noyer conclude that Europe's competitiveness and productivity depend on deeper capital market integration. Without scalable financial markets, innovative companies will continue to seek funding elsewhere, and European savings will continue to flow beyond our borders.
The banking dimension must also remain central. Progress on the banking union, the discussion on prudential simplification, and the cross-border integration of banking activities are intrinsically linked to the saving and investment union's credibility. Europe needs both strong banks and deep capital markets operating within a coherent and integrated framework. National parliaments have a particularly important responsibility in this endeavor. Financial integration must be anchored in democratic scrutiny at the national level, ensuring implementation aligns with European objectives while addressing legitimate domestic concerns.
Ultimately, the question before us is whether we are prepared to match our ambitions with the necessary compromises. The Savings and Investments Union carries high expectations. Delivering on them will require trust between member states, clarity about risk-sharing, and a shared understanding that fragmentation carries high costs. Today's exchange is very timely. Ahead of the commission's midterm review in 2027, our role is to ensure that the legislative negotiations on the market integration and supervision package remain focused on the strategic objective of achieving a genuinely integrated European financial market that mobilizes savings, supports innovation, strengthens resilience, and enhances Europe's global standing.
With these reflections, I look forward to a substantive and forward-looking debate. And I give the floor back to my honorable friend, Mr. Mavridis, for housekeeping remarks.
Thank you, Chair Rodo Credo, for your introductory remarks. To initiate the discussions, which were very similar to the previous one, our invited speakers will provide introductory statements for about 5 minutes. After their contributions, we will open the floor to members of the national parliaments as well as to those of the European Parliament. At the end, speakers will have two to three minutes maximum to reply to questions raised and to give some concluding statements. Please keep your interventions to two minutes.
No more than three minutes, certainly. But you will see, in order to allow as many people as possible to take the floor. If time allows, you may be given an extra slot for possible follow-up questions. As in the previous session, you will need to fill out the speaking card. This time, it's the yellow one.
They are available in the meeting room and are to be filled by both national parliamentarians and MEPs wishing to take the floor. In general, we will try to divide the speaking time according to the following formula: two national parliamentarians followed by one MEP. Again, should the need arise, we might need to adapt this formula during the debate. Let me now welcome Mr. Maximilian Baerbaum, Head of Research and EU Director at the New Financial, followed by Ms. Alexander Mochiska, Managing Director at Better Finance. And finally, the third speaker will be Mr. Matti Lepala, Secretary General and CEO of Pensions Europe.
Let's start with the first one. Mister Birbbaum, you have the floor.
Speaker 36
Thank you, Theo. It's great to have this debate in this room today, as the success of the Savings and Investments Union initiative is in your hands, in the hands of everyone in this room today. At New Financial, we've been tracking the development of capital markets in Europe since the Capital Markets Union was first launched back in 2014. But ten years after the launch of CNU in 2014, capital markets in the EU were just 2% bigger relative to GDP than they were in 2014. Pools of long-term capital haven't really grown; bond markets are down, and equity markets have virtually halved.
The only area that has seen significant growth over those 10 years is the private markets. So, not really a reason to pop the champagne after the first 10 years of CMU. But in my line of work, you have to be an optimist. And so, here are three reasons why I think we can make more progress in the next 10 years. First, for almost every reform that we need to develop capital markets in Europe, there is at least one example of a European country that has already done that reform and done it very successfully.
Speaker 37
People often talk about the investment culture in the US, for example, but we don't need to compare ourselves to the US because we have Sweden, which is already today a nation of investors. You want bigger pools of long-term capital? Well, take a look at Denmark. Denmark has pools of capital that are larger relative to GDP than the US. There's more venture capital investment in Estonia relative to GDP than in the US.
Speaker 36
Poland has a comprehensive capital markets development strategy. Hungary has tax-incentivized investment accounts that help us save to become investors. Ireland is introducing auto-enrollment retirement saving. Italy incentivizes wealthy households to invest in European SMEs. Luxembourg is a global champion in fund distribution.
I could go on. We know what we need to do to build bigger and better capital markets in Europe. We just need to do it. And that brings me to the second point I want to make today. It's very important that, at the EU level and here in Brussels, we talk about how to integrate capital markets across the EU.
And we are, of course, debating this ambitious proposal by the Commission on market integration and supervision. But this should not distract us from the important reforms that can only be done by the member states. Not as a free fall with everyone doing whatever they want, which would only lead to further fragmentation, but guided by guardrails and principles coming from the EU level, which the Commission has done with its recommendations on the introduction of savings and investment accounts and on occupational pensions. To really make progress in developing capital markets in Europe, everyone will need to play their part. EU institutions, EU supervisors, and EU policymakers from the top down aim to improve harmonization, while national governments, national finance ministries, politicians, and regulators from the bottom up work to build capacity in the capital markets at a local level.
I'll keep my third point short. It's very good to see this renewed political ambition and interest in developing capital markets in Europe. But in my view, we still need to make a better case for it: a better case for why we need the capital markets, why we need a savings and investments union in Europe. So, if I could ask members in the room here today, you clearly care because otherwise, you wouldn't be here. But why should your colleagues in other parliamentary committees care about more developed capital markets and the Savings Investments Union?
How could the capital markets help finance and address the many challenges and priorities that we have in the EU? Why do capital markets matter to smaller member states that are far away from Brussels, Paris, or Frankfurt? Why should your constituents care? And what role do bigger and better capital markets play in supporting jobs, innovation, growth, and prosperity in every corner of Europe? Telling a better story and making a tangible connection between the capital markets and the everyday lives of people in every corner of the Union could really help convert that welcome political commitment that we now have in Europe into action.
It's an honor to have been invited today, and I look forward to your comments and questions. Thank you.
Costas Mavrides
Thank you, Mr. Bierbaum. And now the floor is to Madam Alexandra Monchiska.
Speaker 38
Thank you very much. Dear Chair, dear members of the committee, thank you very much for inviting the representative of individual investors to this important debate on the SIU. Better Finance's European Federation will represent the interests of small savers, investors, and financial services users. Our mission is to promote transparency, fairness, and accountability in financial services and to ensure that Europe's financial system serves the real economy and the interests of citizens. We see the SIUS One-in-a-Generation opportunity to help turn European savers into investors and to channel savings into productive investments to strengthen Europe's competitiveness.
Speaker 39
The SIU can be a key component of Europe's response to many challenges highlighted in the recent reports of Mario Draghi, Nicoletta, and Christian Noyer. All three reports stress the need for deeper and more integrated markets to support productivity, growth, and strategic autonomy. However, they also contain a very important warning. Integration must serve citizens, not just the markets. Mario Draghi.
Speaker 38
Despite higher savings, EU households have considerably lower wealth than their US counterparts, largely because of the lower returns they receive from financial markets on their asset holdings. Christian Noyer: household financial savings amount to EUR 35,000,000,000, fueled by one of the world's highest saving rates, 13%. However, these savings are poorly allocated. Enel Ricoletta, financial integration within the single market would remain elusive unless it is clear that such integration serves not merely the finance sector itself. So, all these three quotes capture very well the core policy challenge before us.
Speaker 39
The question is not only how to integrate markets, but how to do so in a way that really improves the outcomes for European households. In December 2025, the Commission published its market integration package to address fragmentation across trading, post-trading, asset management, and supervision. But the finance supports the overall direction of this initiative. And for us, it is not merely a technical overhaul. It is essential infrastructure for the SIU.
So, improving trading transparency, reducing post-trade frictions, harmonizing settlement rules, and strengthening EU-level supervision are necessary steps to make the EU market scalable across borders. But infrastructure integration alone will not automatically deliver retail-relevant outcomes. The ultimate objective must be clearer markets and forcible investor protection and confidence throughout the entire investment life cycle. From a retail perspective, fragmentation is still experienced as limited market clarity. Potential positives of the package include lower post-rate costs, easier EU-wide investing, better price formation if liquidity concentrates on lead venues, and stronger ownership certainty via more efficient settlement.
But we should remember the risks, as benefits can be captured by intermediaries and not passed on to retail investors, and complexity reduction may favor institutions and not individuals. Therefore, retail investors very rarely feel all of this immediately, but it really shapes the spreads, the fees, the trust, and the willingness to invest. And this is ultimately the SIU's goal. So, our message is very straightforward. Integration should improve outcomes and quality for retail investors, not just reorganize the infrastructure.
Turning to pensions. Better Finance has long warned about the chronic underperformance of many supplementary pension schemes in the EU in our annual report on the real return of long-term and pension savings. And this underperformance risks undermining pension adequacy and could contribute to future old-age poverty, so we must tackle it very carefully. The prudent person principle, we see it as a paradigmatic change, and we very much like this approach. We hope it's going to contribute very much towards flexibility and accountability.
This greater flexibility must go hand in hand with stronger governance, and pension providers should be required to properly collect participants' preferences. We welcome the introduction of an explicit duty of care. And on transparency, we strongly support the proposal to provide information on past performance over a 10-year period. However, if a genuine single market for occupational pensions is to emerge, performance comparisons should rely not only on national benchmarks. We also welcome the proposal to ensure equal tax treatment for comparable pension products.
And finally, conflicts of interest remain a pressing issue, and where possible, they should be eliminated and not just managed. We also very much welcome the Commission's blueprint for savings and investment accounts. Financial education and access to simple, cost-effective products must go hand in hand. And knowledge alone is insufficient if the available tools are complex, costly, and fragmented. So, the design features are crucial for savings and investment accounts.
And as already mentioned, we already have good examples in Europe. One of them is Sweden. So, we hope that member states can learn from one another. Dear Chair, dear members, with these important initiatives on the table, retail investors are looking forward to their co-legislators, national governments, and national parliaments to ensure that our interests shape the negotiation, the implementation, and the final outcome. The SIU will ultimately be judged not by the volume of legislation and proposals adopted, but by whether it improves retail savers' and investors' lives.
And if it drives decent real returns, confidence, and participation in capital markets for ordinary citizens. If we succeed in making investing simple, transparent, and performance-oriented, then the SIU will not only deepen markets, but it will strengthen Europe itself. Thank you very much.
Costas Mavrides
Very well, madam Monchska. And now the floor goes to Mr. Manti Leppäla.
Speaker 40
Thank you, Chair. Thank you for having me participate in this important session. The savings and investment union is a crucial initiative for Europe's economic future. And at its core, it's about ensuring that Europe can mobilize its own long-term savings to finance investment, strengthen competitiveness, and support sustainable growth. Pensions are at the heart of this debate.
They are an integral, important part of the future of the SIU. Funded pensions are already among Europe's most important long-term institutional investors. Pension funds invest with very long horizons, often spanning decades, and this allows them to provide stable and predictable financing to the real economy. In this way, pension funds contribute directly not only to retirement security but also to Europe's economic resilience and competitiveness. Funded pensions also play a crucial role in strengthening retirement adequacy and sustainability, and supporting economic growth.
From a social perspective, funded pensions complement public systems and diversify sources of retirement income, strengthening both the adequacy and sustainability of pensions in the context of demographic aging, which is a severe issue in Europe. From an economic perspective, funded pensions mobilize long-term domestic savings and channel them into productive investment. And this strengthens capital markets, supports innovation, and contributes to long-term economic growth. So funded pensions serve both the citizens and Europe's broader economic objectives. Strongly funded pensions and integrated capital markets are mutually reinforcing and essential to the success of the savings and investment union.
At the same time, deeper and more integrated capital markets improve investment opportunities and returns for pension beneficiaries, and Europe cannot strengthen its economic resilience and strategic autonomy without mobilizing its own long-term savings. This is really well highlighted in the reports that have been referenced here before. At the same time, when we look at the proposals, it is essential to recognize that pension funds operate under a clear fiduciary duty to their members and beneficiaries. Their primary objective is to deliver adequate and secure retirement income. Pension funds should not be required to invest in specific sectors or policy priorities, as this would compromise their ability to achieve appropriate risk-adjusted returns.
For this reason, proper diversification should be the priority of pension funds, and no politically driven initiative should disrupt this fundamental principle. Policymakers should focus on creating attractive and investable opportunities that align naturally with pension funds' long-term investment strategies. And I would say that it's not just about policies. It's about the real investee companies. If we look at the American success, which is often the basis for this comparison in this process, it's not that they were invented in Washington.
Washington enabled these companies to grow. And I think this is something that we really need. When we're looking at policy, we need to understand that policy is important, but it is not the solution. We have to create an environment where companies can grow. So, to realize this potential of the SIU, it's essential to reduce fragmentation, facilitate cross-border investment, and ensure proportionate regulatory frameworks that recognize the long-term nature of pension funds and fully respect national competencies in pension policy.
And therein, of course, the national parliaments play an important role. The national pension policy is very much up to the member states and their parliaments. Many Europeans are undercovered. We need more funded pensions. In the SIU, there are good proposals, as auto-enrollment has been very successful in countries like the UK and is now rolled out in Ireland.
It doesn't fit every country, but it can be successful in many countries. We need better pan-European personal pensions, so the regulation is under review. That is important. We have to recognize that much of the horizontal legislation, which is important, puts a lot of burdens on pension funds and is especially challenging for smaller pension funds. So, strengthening funded pensions is not only a pension policy objective.
It's a strategic economic priority and essential to the success of the Savings and Investments Union. It is essential that the policy goals of the SIU remain strong and clear during the legislative process, and that the end results lead to real improvements in the coverage of funded pensions, as well as in the amount of pension savings and investments. Thank you.
Costas Mavrides
Thank you, Mr. LaPala. And now, we open up the discussion with the parliamentarians, starting first with Ms. Xavier Orphanido is from Cyprus. Thank you.
Speaker 42
Thank you very much, my dear colleagues. The European Union is facing very intense international competition and very big investment needs for a green and digital transition, increasing its defense capabilities and energy security. The European Union has many private savings that could finance these needs, but it cannot give this funding to the real economy. Now, we have an investment gap, which restricts competitiveness. It undermines the strategic autonomy and restricts the international role of the Union.
At the heart of the problems is the fragmentation of the capital markets and the deviation concerning control in the member states and reserves regarding how we distribute the risk. And these stop the transborder activity of the companies, and they depend on banking investments. And so, the Union of Investments and Savings is an answer to this investment gap. It has to mobilize private funds to reduce the cost of financing, to support innovation, and to support chances for growth throughout Europe. In order to achieve this, we need real integration of the capital markets to stop the cross-frontier problems and to have better cooperation.
Speaker 41
We need to inform the citizens about the financial issues. The challenge we have in front of us is exceptionally a political challenge. As legislators, we have to show responsibility altogether and promote initiatives. The Disciples Presidency does whatever it can to make progress concerning this union of savings and investments. Our objective is to form a Europe that can finance autonomous growth, promote strategic priorities, increase resilience, and move towards forming a more hopeful and sustainable future for the next generations.
Thank you.
Miguel Orphanizu.
Thank you, Miss Orphanizu.
Sylvie Josserand
Thank you, Chairman. Who are the main stakeholders? We don't have the quantified economic statistics to assess the impact in advance of the Savings and Investment Union. We have the report published in July 2025, released by the French National Assembly. The chair of ESMA at the time, the governor of the Bank of France, and Enrico Letta admit that no impact assessment has been carried out for the Capital Markets Union. So, will we achieve the goals set out?
There is no clarity. The markets ultimately will have the final say. Each year, European savings exceed billions outside of the European Union to the US, where higher interest rates are available. European households and financial investors are bound to invest where they get the greatest return. When we hear calls for a deeper capital markets union, will that suffice to attract foreign investors without an industrial strategy that underpins our economies?
Could financial integration proceed any steps towards improving productivity? We are seeing defragmented capital markets, and if we address these problems, we could see greater investment in Europe. We want to see checks on foreign investment according.
Sylvie Josserand
The sector and volume of that investment. That would be vital in any Capital Markets Union. Thank you.
Costas Mavrides
You. Very well. And now, I give the floor to Mr. Thomas Bahada from the European Parliament.
Thomas Bajada
On the side. So, dear colleagues, we are still not there. We have not yet successfully created a single market that is resilient to developing geopolitical and climate scenarios, adapted to the different European realities, and able to strongly compete on the global scene by amplifying European opportunities and unlocking capital for companies and investors in each of our member states and their communities. And the first struggle is building a genuine European investment culture. This requires building trust in the system, enhancing financial literacy, and creating transparent and tangible investment opportunities that are accessible to ordinary citizens, allowing them to invest directly and be part of the financial game in order to enhance their financial independence, unlock their aspirations for the future, and ensure their protection.
And for this, we must look at a change in the rules to give priority to new retail investors. Hand in hand with this, we cannot underestimate the value of investing in educating our people and investing in financial literacy. And here, we require direct funding to further enhance coordination between stakeholders and different member states. And in fact, I have sought to create a €2,000,000 European pilot project for this year to assess how, as a union, we can collaborate more and build a stronger union approach towards financial literacy. And we, as policymakers, must do everything in our power here in the European Parliament and in national parliaments to facilitate and create the right conditions for accessible investment opportunities for all, and to foster a financially educated population that is ready to seize the opportunities and access the instruments that we can specifically designate for them.
And therefore, let us place our citizens at the heart of what we are calling the Savings and Investments Union. At the end of the day, this makes us more competitive in the global scene. Thank you.
Costas Mavrides
Thank you, Thomas. And now, I give the floor to Mr. Giulio Tercittisancata from
Speaker 12
Thank you very much for your efforts to read out my rather long name. You can just call me Giulio Tertsi. That's enough. Now, I must say, I find this a very interesting debate. We've had some interesting keynote speakers, and I really wanted to agree with what we've heard about pension funds when you refer to the United States.
I think that's a really important reference point for the EU right now. We're talking about trying to create the conditions, a level playing field, to encourage those who are already involved in pension funds.
Speaker 12
Grow without suffering the fragmentation of European legislation and without having excessive restrictions on their financial activities. Doctor Bierbaum talked about what European governments are doing at the moment. You mentioned the Italian government trying to support this kind of dynamic in the financial markets. We're faced with challenges outlined by the Draghi report, including the need for financing to address these challenges, such as defense, among others. We're talking about €750 to €800 billion extra, and that might be a terrifying figure if it were not combined with another huge figure.
And that is that Europe's households have savings, which, if added together across Europe, would be equivalent to about €10 trillion. Which I think represents a pretty good ratio to the EU's annual GDP. So, what do you see as the relationship between what we need to spend and what we actually have as European wealth in the form of household savings? As for the marketing integration and supervision package, well, that's going to be important. It reinforces the role of ESMA as a central supervisor for cross-border infrastructure.
It harmonizes the rules for fund managers. When it comes to the interaction between centralized supervision and national sovereignty, the obstacles to overcome are certainly political and structural, but they must be overcome. We have to go beyond the persistent home bias that we see. Everybody just looks at their own little territory, their local area, and it limits cross-border investments. So, action is required with ambition and courage.
And we also have to look at market supervision and the banking union as a whole. But I think my speaking time is up. Thank you very much for your attention.
Costas Mavrides
Very well. Now the floor I give to Mr. Jose Maria Sanchez from Spain. Thank you.
Speaker 20
You, chair. I agree 100% with what was said by Madame Geron in her previous intervention. I'd like to point out the following. If you've read the background note, there's been a lot of talking about the capital markets, simplification, the reduction of bureaucracy, and harmonization of legislations in different member states when it comes to labor, insolvency, capital markets, and so on. These can all be very useful instruments when it comes to the billions of European savings that are invested in the United States and the European Union.
But these are going to be quite empty. The dynamic holistic approach has strong expectations to overcome long-standing challenges. This doesn't mean anything. Everything that we are reading lacks substance. We say something, and then we need more precision.
A key instrument for achieving the capital markets and the savings and investments union is the Capital Markets Union (CMU) initiative. How are we going to achieve this? It's difficult to continue with this way of arguing when we don't have measures that will attract productive investments for these European savings that are invested outside of Europe. We need to make Europe more competitive. But how do we manage to make Europe more competitive?
Once something has happened, it must come before what happens after. What we do know is that there seems to be a call for greater debt, bringing to mind my previous intervention about public debt. We need the member states to be more competitive, but what about the idea of Europe being more sustainable? I think nothing would be left here or very little. Then you're saying we need to contribute to the European defense in the Mediterranean, and there isn't a lot of intellect behind these statements.
This seems to be something that is at a very early stage, and not enough has been done on this so far. Thank you.
Anouk Van Brug
Thank you, and thanks very much to all for this discussion today. The Capital Markets Union is a subject that has been discussed for a long time now and is more urgent than ever in order to make sure that our businesses can grow here in Europe, and also that our economy can flourish. But we seem to be stuck in this discussion. A small group of large member states has recently indicated its intention to move ahead more quickly with the Capital Markets Union-related reforms. In which specific areas do our guest speakers specialize? I would like to hear a lot more from you about how to fix this.
In which specific areas do you believe a coalition of willing countries could deliver the first tangible results, and how can such progress be structured to remain open and inclusive for the wider Union and to properly move ahead with the Capital Markets Union? Also, we are working very hard on European autonomy in various areas, and the European financial system remains deeply interconnected with, and in many respects dependent on, the United States. So, I would also like to know what concrete steps the EU should take to strengthen its financial resilience in the event of geopolitical tensions or disruptions. And where do you see the greatest structural vulnerabilities today, in order to make sure that we stay strong here in Europe? Thank you.
Costas Mavrides
Okay. Maybe the panelists later on might respond to your questions, which are somewhat questions for all of us. And now, I give the floor to Mr. Gaspars Briskens from Latvia.
Speaker 17
Thank you, Chairman. I would like to broaden the horizon for this discussion a little bit and focus our minds on what arguably is the ultimate prize of any EU structural reforms, namely advancing the euro as an alternative global reserve currency. Currently, according to SWIFT data, more than 80% of trade transactions and around 56% of global reserves are held denominated in US dollars. For euro, it's 7% in terms of trade transactions and 21% in terms of global reserves. The euro is the second most widely used reserve currency, but this number of around 20% has been stagnating over the past decade.
But I'm very happy that the ECB has also recognized that now is the moment for the euro. And then, in my view, and in view of today's discussion, there are at least six prerequisites. One is, of course, the savings and investment union that we are discussing in this panel. The other one is the banking union. I think the Chairman already emphasized that it requires a European deposit insurance scheme and a digital euro.
The third prerequisite is a completed, efficient internal market. The fourth prerequisite is more efficient decision-making, perhaps with a broader use of qualified double majority, essentially so that the rest of the world stops thinking that Europeans cannot make a decision. The fifth prerequisite is a more balanced European Union economy. One where, for example, Germany is not only a super competitive export engine but also the engine for the internal market. And sixth is what we discussed in the previous panel: this mission-oriented industrial policy with a focus on defense, climate, and innovation.
The senior benefits of having a reserve currency are immense and currently almost monopolized by the United States. So, if there has ever been a better moment to advance the euro as an alternative reserve currency, it is today. And I think, with that in mind, we should also be thinking about how to advance the savings and investment union and ultimately create the European Union as a beacon of stability, an efficient internal market, and liquid capital markets. Thank you.
Costas Mavrides
And now, I give the floor to Madam Maria Gabriela Horga from Romania.
Speaker 51
Thank you, distinguished colleagues. So, savings and investment union must become a strategic pillar for Europe's long-term competitiveness. In a global environment defined by competition for capital, innovation, and technological leadership, Europe can no longer afford fragmented financial markets. So, we need less fragmentation and stronger regulatory convergence, more competitive and deeper European capital markets, and further development of alternative investment funds and long-term vehicles capable of financing companies, especially SMEs and innovative firms. This is particularly urgent given that venture capital investment in EU firms remains 6 to 8 times lower than in the United States.
Speaker 52
So, fragmentation remains a major barrier, including in authorization, supervision, and cross-border distribution of funds. Divergent supervisory practices, administrative burdens, and inconsistent interpretation of EU rules undermine efficiency in the single market for capital. If we truly want to mobilize Europe's substantial private savings toward productive investment, we must create a coherent, predictable, and attractive framework both for investors and fund managers. At the same time, we cannot overlook a fundamental element: trust. Without financial education and adequate investor protection, savings will not translate into long-term investments. Confidence in financial markets is built gradually through transparency, sound governance, and stability.
So I initiated two laws, especially for financial literacy in Romania. And this is a step forward in involving national parliaments. But we need more than that. So, in this context, I would like to raise two key questions. First, how can we better mobilize private savings towards long-term investments at the EU level?
Should we consider more coordinated fiscal incentives, the development of simple and transparent pan-European products, and a stronger role for pension funds and long-term alternative investment vehicles financing the real economy? How can we make these instruments more accessible to retail investors without creating additional barriers? Second, how can we strike the right balance between regulatory simplification and maintaining a high level of investor protection and financial stability? Simplification is necessary for competitiveness, but it must not weaken market confidence. What concrete steps can we take to reduce administrative burdens and harmonize cross-border authorization while preserving strong standards for transparency, governance, and supervision?
The Savings and Investment Union has the potential to become a catalyst for growth, innovation, and Europe's strategic autonomy. But to achieve this, we must reduce fragmentation, strengthen trust, and transform European savings into a true engine for productive investments. Thank you.
Costas Mavrides
Okay. Very well. Let's move on now to Mr. Rafal Komarovic is from Poland. Mr.
Rafal?
Ladies.
Speaker 28
And, gentlemen, Poland supports all the changes that are going to result in making the EU a better, more competitive place for investment. And yes, this is what the Savings and Investment Union aims for. But we need to deregulate. We need to change our rules on capital markets, and this will impact our competitiveness. We agree that we have to harmonize our legal rules, but we remain adamant that the member states have to decide themselves what should be scrapped and what should be modified.
We are closely following the solutions from the market integration package. And yes, we do see some potential there. We do think that ESMA should conduct supervision for the largest systemically important entities. And this supervision, however, has to be proportional. It has to take into account different levels of risk.
Speaker 29
We don't want to give more powers to ESMA, for example, to supervise those entities that are not systemically important and that do not operate in a cross-border environment. In our opinion, that could be detrimental to those entities. So we want to focus also on those providers who provide data on consolidated exchange information. We need to assess carefully whether this is necessary. We also need more time to explain to us how the impact of all those rules is going to look in the member states.
Speaker 28
So I do look forward to more cooperation. I think cooperation is important because we all want to focus on improving our ability to invest. Thank you.
Speaker 11
I will give the floor to Mr. Ioannis Paschalidis from Greece. Thank you, Chairman. Ladies and gentlemen, officials of the European Union, colleagues, MEPs, dear speakers, the debate for the Investment and Savings Union does not concern a very simple question. How do we transform the savings of its citizens into investments—investments that create growth, jobs, and better yields for them? Today, in the European Union, we have enormous amounts of savings that remain in bank accounts with a very low yield.
At the same time, businesses, especially SMEs, need capital in order to invest in innovation, in the green transition, and in the digital transition. What is the odd thing? It's obvious. We have available capital, but the capital does not go where it would have the biggest results. The Savings and Investments Union has the ambition to bridge the gap.
The aim is to have more uniform and efficient European capital markets where savings can be channeled securely and transparently to productive investments both within and outside the borders. We have specific challenges, however. First of all, we have the fragmentation of the markets, different national rules, different fiscal rules, and administrative procedures. And all this increased the cost and dissuaded international investments. Second, trust and financial education.
The citizens will invest larger amounts only if the products are simple, understandable, and well overseen. And if they know well about the risks and the yield of their capital, the next steps should follow specific axes: simplification of the rules, reducing red tape, supporting oversight and control when required, to have transparent financial and investment products, and efficient channeling of capital towards the real economy. In closing, I would like to stress that Greece constantly supports the deepening of this investment and savings union and the completion of the banking union, recognizing the importance of stronger and more unified European markets on a national level. We had laws that were passed to support the capital market in Greece. And it shows that our country is trying to adapt to European initiatives.
Thank you.
Costas Mavrides
Thank you, Mr. Pascalides. Now, I should give the floor to the three panelists. Each one of you has three minutes to respond to whatever you wish to say.
Speaker 36
Thank you. It's ambitious to respond to all the questions in 3 minutes, but I'll try my very best. I want to start with what I think is the starting point for deeper capital markets in Europe. And it's right there in the word, in the term "savings and investments union." I think, if I can be a bit controversial, I would focus more on the savings and investments part than on the union part at this point.
Because, quite frankly, right now, in many member states, there simply isn't a capital market that we can integrate. So, we need member states to take these steps they have to take at the national level to build their capital markets. That starts with pools of long-term capital. Now, we need more retail investment. We need bigger pension funds, but these are measures that have to be introduced, implemented, and discussed at the national level with the support of the European Union, with some guidance and best practices, but they have to be implemented at the national level. And yes, I also want more harmonized, more integrated capital markets in Europe, but my worry is that every week we talk about, for example, single supervision, it is a week that we don't talk about pension reforms in Germany, France, or any other member states that need them.
The second point I want to make today, and I think it came through from a few of the interventions, is that all of these reforms, yes, have a happy consequence: we have more capital available to finance the European economy. But the individual saver and their financial well-being, their financial future, should always be the starting point. So, we should think about how we can improve their financial literacy. How can we overcome their inertia by, for example, ordering enrollment in pension funds? And then, as a happy consequence, focusing on the long-term financial well-being of people in every corner of Europe will lead to more financing becoming available for the European economy.
And lastly, if there's only one thing that you take away from my contributions at this session today, it is to just copy what other member states that have deep capital markets today are already doing. I mentioned this before. For every single reform that we want in Europe, there is an example of a European country that has already done it. And if it works in Sweden, Denmark, the Netherlands, Poland, Hungary, Italy, and Estonia, there's no reason why it shouldn't also work in other member states. Thank you.
Speaker 38
Thank you. So I would start when my predecessor has finished. And I would say that we talked a lot today about different obstacles to savings and investment union: the regulatory, the political, the supervisory obstacles, and there are many. However, when we talk about solutions and how to drive this project forward, we should really have at the premise and at the center of our discussion the financial well-being and the financial health of the U. S.
Citizens are really the core goal of the SIU. So, turning that many savers that we have in the EU into investors. And of course, the question is how we do it. We think that the proposals we have right now on the table, submitted by the European Commission, are quite a good point to start the discussions. And as much as I agree with a colleague who said that we should really work also on the national level, we also need some solutions that are developed at the EU level.
And here, one very good example is the recommendations for a blueprint for a savings and investment account. But even though it is a European blueprint, it is, in fact, based very much on the successful project that we already have in Sweden and the one that Beta Finance has referenced for many years when discussing the tools and solutions to improve and drive retail participation in capital markets. Because quite often, what we hear about retail savers and investors in the EU is that they are very risk-averse. Unfortunately, when we look at where many of them invest, it's crypto assets, which you can say much about, but definitely, it's not risk-free. So, why do they invest in crypto?
Speaker 39
And the answer is quite often that it is simple for them. They can do it on their smartphone. There are not many obstacles to doing this. So, we should make saving and investing in capital markets just as easy. And Sweden has already shown us how to do it.
Speaker 38
It is very simple. It is really effortless. The investors do not have to fill in complicated tax declarations. Everything is done automatically, and the tool is very simple. And there are not many, how can I say, constraints with the Swedish savings and investment account?
We had a couple of comments today concerning the geographical direction of investments in the EU. Yes, this is true. Many EU investors already invest in the U.S. S. And overseas.
They do it because of the real net returns they receive from the investments. So, when we talk about driving greater participation, we also need to talk about reducing the inefficiencies of the financial industry in the EU, because EU citizens should not be expected to foot the bill due to those inefficiencies. And when you look at the finance report on the real return of pension savings and long-term savings, too many EU products are underperforming. This should be tackled in the first place if we want savers to start investing their money. They need to be provided with very good options for investing that provide them with decent real returns.
Speaker 39
It is possible. We have, again, examples in many member states. One of them is Sweden. It is happening right now. Swedish savers can sleep very safely when it comes to pensions.
Why cannot it be the case for EU savers and investors in other member states? So I would like to see member states really learning from one another and already looking at the best practices available. Thank you.
Speaker 40
Thank you, Chair, and thank you for the good comments you made. I agree with the problem of the lacking impact assessment of the SIU and also parts of the SIUs. For example, the pension legislative proposals do not have any impact assessments, and we are afraid that what we're actually seeing is not support for more funded pensions, but more supervision and more administrative burden, and that should not be the end result. There were remarks about the investments in the US and the US pension funds as well. And if we look at the situation, many European pension funds invest in the United States.
Half of the global capital markets are the American markets. Two-thirds of the pension funds in the world are American. So, out of €70,000,000,000,000 US dollars, two-thirds are the American pension funds. So they are the market. They are the biggest players, and it has an impact.
One issue is the risk associated with these investments. European pension funds were last year faced with Donald Trump's big, beautiful bill, which proposed to put a 50% withholding tax on foreign investors like pension funds in Europe. They pulled that back, but that's a real risk with these investments: the political risks are real. And, hopefully, Europe can be attractive with good investment opportunities and good investment returns. And then I hope that European pension funds can and will invest much more in the European economies, but it cannot be political investment.
It has to be real investments with real returns. Together, of course, with good industrial policies and good strategies that enabled Europe to produce these investment opportunities. Financial literacy was mentioned by many. That is important. I am sure that retail investors can play a much bigger part in Europe than they have played before.
But also, for collective investments in pension funds, financial literacy is increasingly important because many more of the investment risks are with individuals. So they need to know much more, understand the risks, and then act accordingly. Thank you.
Costas Mavrides
Okay. We will take it in. And now, before I give the floor to my co-chair, I'd like to open up the discussion. If anyone wants to take the floor for the second time for maybe a question or a short comment, feel free. Let's give some thoughts. Anyone who might want to take the floor for the second time for a short comment, question, or response?
No. Madam Chair, dear Christiana, you have the floor for your closing remarks.
You, dear Costas. Now, as we conclude this timely and substantive exchange, allow me to share a few final reflections. Today's discussion has confirmed that the Savings and Investments Union is a prerequisite for achieving strategic autonomy and for implementing our common priorities. Europe has the savings. However, we need the political determination to channel them effectively into productive investment within our Union.
Our fruitful discussions have highlighted that fragmentation remains our greatest obstacle. Legal divergences, supervisory complexities, and long-standing national preferences continue to slow integration. Without trust between member states, citizens, and investors, no real progress can be achieved. Our deliberations have also underlined that democratic scrutiny, both at the European and national levels, is essential to ensure legitimacy. The Savings and Investments Union will advance only if we align our ambitions with political resolve, and if we put European interests above narrow national interests.
With these thoughts, I thank our speakers, my co-chair, and all colleagues for their valuable contributions, and I look forward to continuing our interparliamentary dialogue and cooperation, aiming to deliver tangible results for our citizens and businesses.
I would also like to thank all the speakers, the panelists, and the members for participating in today's discussion. Thank you also extends to my co-chair, Christiana Erodokridu, for co-chairing today's meeting. This debate was very timely indeed, taking stock of the progress so far. The key challenges lying ahead and how to best advance work on the savings as SIU. Today's discussions highlight the importance of continued dialogue between our parliaments on how to better pursue our shared objectives of strengthening Europe's strategic autonomy, mobilizing investments for the real economy, tackling fragmentation and regulatory barriers, and boosting competitiveness.
Our constructive discussions will continue tomorrow in the plenary sessions. I invite you all to attend the two sessions with Professors Christopher Pisaridis and Rigoleta. Likewise, you are all invited to attend the official dinner, which will take place in the members' saloon on the 1st floor downstairs at 07:00. This will provide a further opportunity to continue our exchanges of national experiences and strengthen our cooperation. Thank you again, and I wish you a nice evening. I look forward to seeing you at the dinner in about half an hour.
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