Key facts
- Europe must leverage its €35 trillion in private savings to fund economic transformation and compete with the U.S. and China.
- Investors and policymakers expressed concern that private savings are not being channeled into crucial transitions.
- Former ECB chief Mario Draghi previously warned of the EU's need for coordinated industrial policy and massive investment.
- Initiatives like the Digital Omnibus Agreement and new savings accounts are seen as steps toward deregulation and investment.
- The U.S. holds a significant advantage in startup creation, accounting for 55% of global unicorns.
- The European Investment Bank's European Tech Champions Initiative has helped create a dozen unicorns since 2023.
Europe needs to unlock its substantial private savings to finance its economic transformation and keep pace with the United States and China, according to investors and policymakers speaking at a Reuters Next event. Benoit Peloille, chief investment officer at Natixis Wealth Management, highlighted that Europe holds €35 trillion ($40.7 trillion) in private savings, which could fund necessary transitions if confidence and stability are built to encourage investment beyond low-risk assets.
Former European Central Bank chief Mario Draghi had previously warned in 2024 that the EU must improve industrial policy coordination and decision-making speed to attract massive investment, or risk a 'slow agony' against the more streamlined economies of the U.S. and China, which are advancing rapidly through AI innovation.
Signs of political will are emerging, with initiatives like the Digital Omnibus Agreement and the creation of savings and investment accounts indicating a move towards deregulation and investment encouragement, according to Alison Martin, CEO for life, health and bank distribution at Zurich Insurance. She noted that the next six months would be crucial in determining Europe's progress.
However, challenges remain. Nizar Trigui, CTO at GXO, pointed out that the U.S. possesses competitive advantages such as significantly cheaper energy, more flexible labor laws, and faster AI deployment. Data from the UN's World Intellectual Property Organization shows the U.S. accounts for 55% of the world's unicorns, a figure Peloille deemed 'absolutely not acceptable' given Europe's global standing. Nadia Calviño, president of the European Investment Bank, agreed that while the EU is on the right path, it must 'go bigger and faster,' citing the success of initiatives like the European Tech Champions Initiative in creating a dozen unicorns since 2023.