Von der Leyen: €300 billion in European savings flown overseas every year, primarily to the US, will be invested in Europe from now on. All 27 EU states agreed to establish the S&I Union, a step toward the full Capital Market Union

[u/paneuropeanism_]

https://streamable.com/4h43qk

[u/Upbeat_Parking_7794]

Savings flee because US market is growing more than the European. 

I keep some money in ETFs 100% European, but worldwide ETFs have a small European coverage because of the company market caps. And tech where growth has been is 95% in US. 

Maybe this can help market cap of European companies to grow.. 

[u/paneuropeanism_ → u/Upbeat_Parking_7794]

And why is it growing more? Because Europe lacks the scale and is hampered by internal national barriers. Every step to remove those barriers is a step toward growth. No state alone in Europe can compete with the big powers. A Capital Market Union is inevitable.

[u/StorkReturns → u/paneuropeanism_]

And why is it growing more?

Because US economy has had more rapid growth. All other reasons are minutia. US capital markets are a better place to park capital because their economy has been growing and EU's economies has been stagnating or growing much slower. US has growth sectors and EU has only mature sectors of economy.

Without fixing the economy, you cannot fix this imbalance. No magical hand waving with change that.

[u/Murky-Relation481 → u/StorkReturns]

I run a small company in the US that has a number of European contractors in a fairly niche market space that tends to rely on government grants or work with groups that are contracted with the government.

We looked at moving operations to Europe, but not only is private capital harder to come by there, the public capital, both in our market space and in general is basically non-existent, at the individual national or Union level.

The European companies we work with are also very slow and conservative, even though we're in the same market space and those same companies are much more agile in the US (and this even in our market which is historically slow).

Ultimately it just was not something anyone thought would work.

[u/nuxenolith → u/StorkReturns]

Growth is a cycle.  Inflows ->  productive deployment of capital -> returns on investment -> investor interest -> inflows

There is plenty of opportunity in Europe, but too much friction...wheels not greasing, and barriers need lowering.

Further,  US dominance is a current reality, but not an immutable truth.  Argentina was once a Top 10 economy globally.

[u/Appropriate-Bird-354 → u/nuxenolith]

Growth is a cycle. Inflows -> productive deployment of capital -> returns on investment -> investor interest -> inflows

You're missing many critical factors in growth.

Micromanaging international capital deployment isn't the solution to the fundamental differences between the US and EU economies.

[u/landismo → u/paneuropeanism_]

Here we are regulating markets that don't even exist now. That's the EU problem, no the lack of a capital market union. That's just peanuts, if the big money see potential, they couldn't care less if they need to go to germany or to france.

[u/RandomThrowaway18383 → u/paneuropeanism_]

I think the issue is Europe hasn’t shown any direction to encourage growth of eu companies. I like the pro eu stance sure but people invest in us because US companies grow