**Title: EU Urged to Mobilize Private Savings for Economic Transformation**
Europe is facing a critical juncture as investors and policymakers emphasize the need to harness the continent's vast private savings to fund essential economic transformations. Speaking at the Reuters Next event on Tuesday, experts highlighted that the European Union (EU) must tap into an estimated €35 trillion ($40.7 trillion) of private savings to compete effectively with the United States and China.
Benoit Peloille, Chief Investment Officer at Natixis Wealth Management, pointed out that this significant pool of private savings could facilitate the necessary transitions within the European economy. He stressed the importance of building confidence and stability in the market to encourage these savings to move away from low-risk assets and into more productive investments that can drive innovation and growth.
Former European Central Bank President Mario Draghi echoed this sentiment, warning that without better coordination of industrial policy, quicker decision-making, and substantial investment attraction, Europe risks facing a "slow agony" as it falls behind the more streamlined economies of the U.S. and China. Draghi's comments reflect a growing concern that Europe is lagging in the race for technological advancement, particularly in areas like artificial intelligence (AI).
Alison Martin, CEO for life, health, and bank distribution at Zurich Insurance, noted that there are signs of political momentum within the EU. She pointed to initiatives such as the Digital Omnibus Agreement and the establishment of savings and investment accounts as evidence of the EU's commitment to deregulation and fostering a more investment-friendly environment. Martin expressed optimism about the next six months, suggesting that they will be pivotal in determining whether Europe can step up its efforts to enhance its competitive position.
The challenges facing Europe are underscored by its current economic landscape. Nizar Trigui, Chief Technology Officer at global logistics firm GXO, highlighted that the U.S. enjoys several competitive advantages, including lower energy prices, more flexible labor laws, and a faster pace of AI deployment. These factors contribute to the U.S. accounting for 55% of the world's unicorns—startup companies valued at over $1 billion—according to the UN's World Intellectual Property Organization. Notably, the recent initial public offering of SpaceX has propelled it into the ranks of the world's five most valuable companies, further illustrating the dynamic nature of the U.S. tech landscape.
Peloille criticized the scarcity of unicorns in Europe, describing it as "absolutely not acceptable" given the continent's significant economic weight. He called for a concerted effort to create a more conducive environment for capital raising, which is essential for fostering innovation and entrepreneurship in the region.
Nadia Calviño, President of the European Investment Bank (EIB), acknowledged that while the EU is making progress, there is still much work to be done. She emphasized the need for the EU to "go bigger and faster" in its initiatives. Calviño pointed to the European Tech Champions Initiative, which has successfully created a dozen unicorns since its inception in 2023, as a positive development. However, she underscored the importance of scaling these companies and increasing their numbers to enhance Europe's competitive edge.
As the EU navigates these challenges, the call to mobilize private savings represents a crucial step in fostering economic resilience and innovation. The coming months will be critical in determining whether Europe can effectively leverage its financial resources to drive growth and compete on the global stage.