EU leaders have taken a significant step towards integrating the bloc’s financial markets to compete with global powers like China and the United States in the race for clean technology. During a summit in Brussels, leaders discussed the need to scale up the single market to include defense, energy, finance, and telecom sectors.
The current fragmentation in these sectors, with divergent national rules, is seen as hindering the EU’s competitiveness. European startups struggle to raise funds compared to their US counterparts, leading to a significant outflow of savings from the bloc into US markets each year.
European Commission chief Ursula von der Leyen emphasized the importance of integrating the EU member states’ markets to boost the development of European companies. However, the idea of market integration has divided the bloc, with intense discussions among leaders during the summit.
The push for market integration comes at a crucial time as the EU aims to ramp up investments in clean energy and digital transitions, requiring nearly 620 billion euros annually. The EU is facing challenges in innovation and economic performance compared to the US and China.
Former European Central Bank chief Mario Draghi has called for “radical change” to address these challenges. The EU leaders are under pressure to make progress in integrating capital markets and harmonizing regulations to drive growth and competitiveness in the region.