It’s not every day that an arcane European Union initiative goes viral online.
But last Friday turned out to be that day thanks to French Finance Minister Bruno Le Maire exporting his frustration with the slow progress of the bloc’s capital markets union (CMU) project straight to social media with an online clip that has since amassed more than 8.5 million views.
Now, a whole host of online channels are circulating the French-language clip, in some cases in AI-enhanced dubbed English, as proof that the EU is bankrupt and that Brussels is on the verge of raiding Europeans’ savings, sparking critiques and memes.
At issue is Le Maire’s contention that a capital markets union would give authorities the “ability to mobilize all of Europeans’ savings, some €35,000 billion worth, to finance the climate transition, fund our defense efforts, and invest in artificial intelligence.”
Some, such as Arnaud Bertrand — a tech entrepreneur whose posts frequently fetch over 1 million views on X (formerly known as Twitter) — alleged Le Maire was “straight out declaring that Europe has run out of money” and signaling EU leaders’ intent to use Europeans’ bank deposits to fund public spending, including on aid to Ukraine.
Lost in translation
But that’s not quite what’s happening here.
The real point of the CMU is to create a single market for investment in the EU — one where people can invest across borders easily, much as they do across states in the U.S., while also benefitting from scaled-up services.
So, rather than having 27 national pension schemes, under the vision consumers could pay into a pan-EU one. And, rather than navigating different tax regimes across EU countries, people could invest abroad in the EU as easily as they can in their home country. European companies, meanwhile, would be able to access financing from the whole of the EU, rather than being forced to list in the U.S., as German company Birkenstock did last year to Brussels’ embarrassment.
The key confusion with the online reaction to Le Maire’s rant is that requisitioning savings is not on anyone’s agenda. The CMU, as it stands, is intended to be entirely voluntary. What’s more, even those in EU policy circles believe Le Maire’s bark is worse than his bite in pushing for the project.
Le Maire expressed equally bombastic language to reporters.
“I’m fed up with discussions. I’m fed up with empty statements. Do you really think that China and the U.S. will be impressed by our statements? We need decisions,” he told reporters as he entered Friday’s meeting of European finance ministers in Ghent, Belgium.
However, given the glacial progress on the initiative to date, some of the French frustration might be justified.
What’s taking so long?
The EU has wanted a single market for capital since close to its inception, while the European Commission has been trying to regulate a CMU into existence since revealing a dedicated action plan nearly a decade ago.
Today’s reinvigorated push for action is a function of the EU struggling to keep up in an increasingly competitive landscape. Unlike the U.S., the bloc can’t easily throw huge sums of money at green industrial policy via an Inflation Reduction Act-style act. Nor can it match China’s aggressive state support for key industries like solar panels and chip manufacturers. Meanwhile, the importance of meeting green and digital transition goals has upped the urgency of unlocking private investment alongside public funds.
This is especially the case now that governments, in the wake of unprecedented levels of EU public spending to prop up the economy during the Covid-19 pandemic and during the energy crisis that followed Russia’s invasion of Ukraine in 2022, are having to tighten their belts.
For now, the EU is working on moving the CMU along at different levels. Finance ministers plan to sign off on a political statement with their priorities for the project next month, and former European Central Bank chief Mario Draghi is working on a report about the EU’s competitiveness. The Commission, on its part, has put forward legislation on listing and retail investment with the aim of making capital flows across the bloc more simple.
But Le Maire’s argument is that none of this is enough, and if the EU tries to move forward with 27 countries on board, the CMU will never get done due to the complexity. Instead, he wants a smaller group of countries to move forward with cross-border projects to speed up investment.
Nonetheless, at the Ghent summit, officials involved in the drafting of the Eurogroup statement and deputies from national ministries gave a resounding eye-roll to Le Maire’s latest outburst, knowing that behind closed doors he is far more cooperative.
France’s finance ministry, meanwhile, isn’t too worried about the naysayers. Speaking to POLITICO, one spokesperson said the CMU project is “clear and credible” and France will keep working on it.
“For those who have questions, we are open to discussion to make it understandable,” they added.