French Central Bank Governor, François Villeroy de Galhau told Maltese MEP Alfred Sant that Europe needs reforms fostering entrepreneurship and emphasised that trust is essential in the creation of new investments in Europe.
Monsieur Galhau, addressing the Economic and Monetary Committee of the European Parliament (ECON), said Europe needs much more trust, otherwise it is perceived as a “transfer Union”, which goes only one way. “We have the next generation creating start-ups but we need reforms fostering entrepreneurship in Europe. If this is your point, I agree with you.” Galhau told the Maltese MEP who asked him to elaborate on the reasons leading to the lack of investments in Europe, a statement issued by Dr Sant's office said.
The Maltese MEP referred to the French Governor’s idea of a finance minister for the eurozone. “Don’t you think that unless he/she has federal powers, such an appointee will not have sufficient clout to really coordinate relevant policies among member states and the government? Would not his/her success depend on the availability of federal revenues secured through EU wide taxes? Would this be a step too far for member states to accept taking a long time to be implemented? Is it counterproductive to propose a long term solution giving the impression that effective solutions are not available in short to medium term increasing the expectations that disappointing performances are bound to persist within the eurozone? It’s all a question of expectations as well. If one pushes forward an aim, that cannot be reached within the next electorate mandate, that will increase the perceptions in markets and among individuals that things are really getting worst rather than better.”
“Do you think we have the right, necessary and sufficient tools to foster investment through the European Fund for Strategic Investments (EFSI) and other structural funds? Or do we lack something that goes closer to the bone, namely from saving extras to investment? Don’t we need something that is much more vital in order to be able to reach our aims?” the Maltese MEP asked Monsieur Galhau.
Monsieur Galhau replied that the first important and urgent step is that the European Finance Minister should come, with a coordination part and then a budget part. Our issue at present is this investment turf. This is the core of the European disease. Not only Europe, it is also present in the US, with stagnation. But it is especially European: this is why we should organised together the Juncker Plan and the Capital Markets Union (CMU). “When you say “closer to the bone”, if you mean national reforms, strong reforms to stimulate the desire of investors, then yes. Equity financing for firms is very important. We need more business-friendly policies in order to increase our entrepreneurship. This is one of our weaknesses,” Galhau told the Maltese MEP.