r/europe • u/paneuropeanism_ Europe • 13h ago

News 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

https://streamable.com/4h43qk
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u/loulan French Riviera ftw 10h ago

I mean sure it's an improvement. But the claim that €300 billion will stay in Europe is dubious, unless I'm missing something.

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u/AssistanceCheap379 10h ago

Its more of a slow move. Today 300 billion, next year maybe 280 billion, with 30 billion more invested in EU markets.

It’s impossible to move the entire system in one go, but its possible and very viable to do it in 10-25 years depending on how aggressive the EU would be in it

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u/rezistS 10h ago

Simplified best case in a vacuum scenario makes for more clicks when put into a headline.

It also makes it seem like the policies work before they are even implemented to in turn make it seem like people are making things happen.

Von der Leyen: please please don't send all your investment capital to the US pleaseee doesn't make an upbeat and promising headline (but it would make me click)

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u/Prince_of_DeaTh Lithuania 9h ago

You're missing that it’s institutional money, not retail. European pension funds send hundreds of billions to Wall Street simply because our 27 fractured markets lack liquidity. Fix the regulatory fragmentation, and that massive pool of capital finally has a reason to stay.

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u/PalantirImperator 8h ago

It still doesn't on its own give them a reason to stay, unless those investors expect growth to beat the US companies and indices these institutions are currently invested in. Japan, where I live, has tried this for years, to get their famous "wall of money" out of cash and into the financial markets with tax-incentives for investing in equity markets- but it failed to stimulate the Nikkei because all it did was push tons of money into foreign equity funds that track the S&P 500- because that's where the growth has been.

Fixing the regulatory fragmentation is nice, but absent the expectation of growth that's competitive with the US (or some other form of protectionism that punishes people for sending capital abroad), it's not going to make a significant dent. Capital markets are global now and the money will keep flowing towards where markets foresee the most growth.

It still seems like a great idea though- can't hurt.

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u/br0wntree 6h ago

Size does matter when it comes to capital markets. It is one of step many but reducing fragmentation and increasing efficiency will help even if the it is small.

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u/SpacePontifex 6h ago

Agree with you but it’s a step in the right direction. Hopefully people realise more and more nowadays that we need to position ourselves as a competitor to the US.

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u/siazdghw 24m ago

I'm sure pensioners will love it when they find out that their retirement money was forced into a historically worse market, rather than a historically better returning one.

When the pension payments get reduced due to worse performance, I'm sure the pensioners will be glad to hear their money is going to Aldi and Lidl instead of Amazon.

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u/87utrecht 9h ago

Instantly making sure that money stays within the EU would be shooting yourself in the foot because europe also owns those american assets. Letting all the money leave europe is also shooting yourself in the foot. So it has to be done slowly.