German Chancellor Olaf Scholz delivered a compelling call to action on Sunday, underscoring the urgent need for the European Union to finalize the establishment of a comprehensive banking and capital markets union.
Scholz, addressing a conference in Berlin attended by European delegates of his Social Democrats (SPD) party, highlighted the critical role that the completion of this union plays in enabling the EU to effectively rival economic powerhouses such as the United States and China, especially in the rapidly evolving landscape of emerging technologies.
He stressed that this initiative is not just a matter of economic strategy but is intricately tied to the broader goals of fostering sustained economic growth and creating job opportunities within Europe as reported by Reuters.
A central challenge identified by Scholz is the existing fragmentation within the EU's single market, particularly in financial matters. With a population exceeding 400 million, the EU possesses immense economic potential, yet this fragmentation hinders the bloc from fully leveraging its collective strength.
Scholz argued for the urgent completion of the European project, emphasizing that such consolidation is indispensable for empowering European companies to thrive on the global stage. The Chancellor's vision revolves around turning the EU into a unified force that can harness its economic might cohesively.
While the proposal to establish a single market for capital has been on the table since 2015, Scholz expressed disappointment at the lack of tangible progress. Undeterred, he called for renewed and accelerated efforts to advance this plan, highlighting its potential to significantly enhance the EU's economic prowess.
The completion of a comprehensive banking and capital markets union, according to Scholz, is a transformative step that can reshape the economic landscape of the EU, allowing it to compete more effectively in the global arena.
In addition to advocating for the banking and capital markets union, Scholz put forth another crucial proposal — the implementation of a minimum tax rate of 15% for companies across all EU countries.
This proposal is strategically linked to the effective functioning of the banking and capital markets union. By posing the question of whether a uniform tax rate could serve as a foundational element for the success of the union, Scholz addressed concerns that some banks might gravitate towards EU jurisdictions with exceptionally low taxes.
He highlighted the potential risks associated with this scenario, emphasizing the importance of preventing situations where European taxpayers would bear the brunt of financial setbacks.
Scholz's call to action aligns with a collective appeal made by the heads of EU institutions in December. In that joint appeal, the EU leaders urged for the strengthening of the euro and emphasized the need for progress towards the establishment of a capital markets union.
The Chancellor's comprehensive economic vision reflects a broader commitment to fortifying the EU's economic resilience and competitiveness on the global stage, signaling a strategic push towards a more integrated and formidable European economic landscape.
28.01.2024
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