Lagarde: “Europe Loses Ground, a Single capital Market is Needed”

The technological gap with the United States is growing wider and wider, and Europe matters less and less on a global level. That is why the Union must change its approach and promote the integration of capital markets.

“Since last year, the decline in Europe’s innovation position has become more evident,” Christine Lagarde explained in a speech at the 34th European Banking Congress in Frankfurt. “The technological gap between the United States and Europe is now evident. The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world. As the most open of the major economies, the EU is more susceptible to these trends than others.”

Among the prescriptions for reversing the trend, Lagarde cites “the urgency of integrating our capital markets” and shifting from a bottom-up to a top-down approach.

Integrated capital markets will facilitate the financing of innovation: “Capital markets are the missing link for Europeans to turn their large savings into more wealth, which will ultimately allow them to spend more and strengthen our domestic demand.”