ECB’s de Guindos: Urgently Need to Increase Investment in the EU

18 June 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Tuesday called for urgent action to increase investment in the European Union and address looming challenges.

In a speech at the joint conference of the European Commission and the ECB in Frankfurt, de Guindos said, ‘Financial integration has supported the euro area’s resilience in the face of significant geopolitical risks, economic shocks and unprecedented high levels of inflation. This is reassuring. However, the decline in certain measures and the sluggish progress towards greater integration is disappointing. Urgent action is therefore needed to increase investment in the EU and establish clear priorities to address the challenges ahead.’

The EU must improve both its productivity and competitiveness, and the green and digital transitions required ‘massive investment’, he said.

‘The single market for goods and services is essential to attract investment, make our Economic and Monetary Union more resilient and support the EU’s role as global player on the international stage’, he said.

To achieve economic growth in the EU, funding needed to be used in the most effective way, he said, calling for ‘policies that support economic restructuring and projects that provide opportunities for more productive funding.’

‘Europe remains primarily bank-based. And completing the banking union remains a priority’, he said. ‘A single capital market needs to come in addition to, and not instead of, a complete banking union.’

The ECB’s Governing Council saw a more integrated EU banking market as a core reason to develop the capital markets union (CMU) and to establish a single market for capital in the EU, he said.