Published on May 24, 2024 at 4:42 p.m.
Didier Borowski
Reading time 2 minutes
The European Parliament recently voted in favor of the new budgetary rules. These will be effective from January 1, 2025. Good news, investment spending and reforms are encouraged, while governments are given more responsibility for the strategy to follow.
Other good news is that the Europeans are finally taking the bull by the horns: the Noyer report recommends a deepening of the Capital Markets Union. Creating tax-attractive long-term savings products would encourage European households to release part of their savings (estimated at more than 35,000 billion within the EU) to finance European investments.
But will this be enough? We can doubt it. Investment needs to finance the green and digital transitions by 2030 are estimated at around 1,000 billion euros per year. Added to this are the growing defense needs. However, budgetary constraints will restrict over-indebted states. And the well-known inertia of households in terms of savings behavior should encourage caution regarding the amounts that can be mobilized. The budgetary architecture should be complemented by a new investment program financed at EU level. In the European Parliament, the conservatives are today opposed to contracting a new common debt. To what extent can the June elections change the situation? Obviously, no one knows yet. But it is not impossible that parties of very different persuasions agree to jointly finance needs linked to the defense of the continent.
Didier Borowski
Head of macro policy research, Amundi Investment Institute
Didier Borowski is responsible for macroeconomic policy research at the Amundi Investment Institute. Previously, he held several positions: head of the Rates and Exchanges strategy, co-head of the Strategy and Economic Research team, head of macroeconomics and more recently head of global views. Before joining Amundi, he was an economist and senior strategist at Société Générale Asset Management (2000-2009). Didier Borowski began his career in the Forecasting Department of the Ministry of the Economy and Finance. He also served as an expert to the European Commission. Didier Borowski has a doctorate in economic sciences. He was an Associate Professor at Paris Nord University (2007-2011) then taught for several years at Paris-Dauphine University.
