Under the shadow of developments and escalating tensions in the Middle East the ECOFIN convened on Tuesday morning, March 10th. The Minister of National Economy and Finance, Kyriakos Pierrakakis, during his intervention, emphasized the need for Europe to accelerate initiatives that strengthen the integration of European markets and the resilience of the economy.
Mr. Pierrakakis warned that the cost of delay in advancing critical reforms is particularly high in an international environment of increased volatility, noting that Europe no longer has the luxury of time.
Referring to the Savings and Investments Union, the minister emphasized the importance of promoting initiatives that will strengthen capital market integration, create economies of scale, and make the European financial system more efficient and resilient.
Full statement by Kyriakos Pierrakakis at ECOFIN
“We were discussing the Savings and Investments Union at the previous ECOFIN as well, in a similar public forum, although we were then examining a different version of the issue. The formulation I had used then, and I will repeat today, is that this is the most important policy agenda in Europe.
I would also like to praise again the efforts of Maria Luís Albuquerque, as I had done previously, because this is a major effort which she leads with determination.
There are certain issues which, when we discuss them publicly, citizens understand immediately. For example, yesterday we discussed energy at the Eurogroup. It’s the number one topic discussed internationally and is fully understandable.
However, when we talk about the Savings and Investments Union, the topic is much more technical. Therefore, this is not only a policy challenge, but also a communication challenge on our part: to explain to citizens why this is important and why we call it the most important policy agenda in Europe. And indeed it is.
This agenda has many specific aspects. I wouldn’t characterize some as less important than others. I would say it’s a bit like American football: you advance on the field by gaining a few inches each time. And this is exactly what the European Commission is trying to do. In one sentence: you have our full support in this effort. And the discussion on market integration and supervision constitutes a central part of this effort. Today, Europe faces two major structural transformations.
The first is that capital markets in Europe remain fragmented. Liquidity, infrastructure, and supervisory practices continue to be organized largely at the national level.
The second is that financial innovation is accelerating rapidly, due to technological progress: from transactions based on artificial intelligence, to digital financial infrastructures, digitization of financial assets, as well as new cross-border platforms.
Especially regarding the second point, let me say it straight: What is our plan? Will we do it 27 times, or will we do it more centrally? I think the answer is rhetorical.
We must create economies of scale with a specific regulatory/institutional framework. And both developments I mentioned earlier are closely connected.
Financial markets are “network” industries. Scale matters. It matters for liquidity, for data, for infrastructure, and even more for supervision itself.
As financial technologies become more complex and more cross-border, effective regulation requires markets with greater depth and liquidity, stronger data utilization capabilities and more coordinated supervisory capacity – exactly what we are discussing today.
Fragmented markets are not just less efficient, they also make supervision more difficult. In this context, the market integration and supervision package presented today constitutes a very important step forward.
By strengthening convergence in the way supervision is conducted and giving ESMA a stronger and clearer role, we can improve consistency throughout the Union.
This must be done without creating dual competencies between ESMA and national regulatory authorities, whose proximity to markets and expertise remain essential. I believe, however, that this is recognized in the proposal. The goal is not dual competency, but a more cohesive and effective supervisory framework.
These initiatives can also help by harmonizing rules, simplifying the cross-border activity regime and limiting the addition of additional national requirements beyond European rules. This way administrative burdens will be significantly reduced and market participants will be able to expand their cross-border activities.
There are many ongoing discussions around this broader financial policy portfolio. Recently, for example, I heard Chancellor Merz talking about the idea of a single European stock exchange. Such ideas reflect the broader recognition that scale matters in capital markets. And we all must recognize this.
In closing, I will make a more general observation. As Maria Luís also said, we often say that we all agree with this agenda, but then an asterisk appears with a “but,” where everyone adds a specific exception that concerns them.
If we don’t realize that these exceptions are less important than the overall goal, then there will be no progress. And there must be progress.
Because the cost of delay is huge. We don’t have the time. We simply don’t have it.
And that’s why you have our full support.
Thank you.”
