Mr President, Can I go back to your idea about a finance minister for the eurozone, and doing it from a relatively crude perspective..in terms of how he or she is going to coordinate relevant policies among Member States and the Government? Don’t’ you think that unless he or she has federal powers, such an appointee will not have sufficient clout to really coordinate matters? And would not his or her success, then depend on the availability of federal revenues secured through EU wide taxes? However, would it not seem that this would be a step too far for Member States to accept, and it would take a long time to mature and to get implemented? And on that basis, would it not be or is it not counterproductive to propose a solution that lies quiet far away therefore giving the impression that an effective solutions are not available in the short to medium term and increasing thereby the expectations that disappointing performances are bound to persist within the eurozone? It’s all a question of expectations as well. If one pushes forward an aim, that cannot be reached within the next electorate mandate, that will increase the perceptions in markets and among individuals that things are really getting worst rather than better.
My second question, again you have referred today and you have done it in other instances like with Corriere della Sera for instance, to the savings cloth and the investment dent, which is a very important point. You have been also making the point in this context, for a structural rebalancing of saving and investment. To quote you clearly, fostering investment rather than reducing savings. But that you have referred to EFSI and other structural funds for investment, to do this. Do you think we have as of now, the right, necessary and sufficient tools to do this? Or do we lack something that is much more fundamental, in order to be able to carry out more fundamental, something that goes closer to the bone, in doing this what you propose, namely, from savings extras, to investment? Don’t we need something that is much more vital in order to be able to reach (the start)?
Answer from French Central Bank Governor, François Villeroy de Galhau:
Your 2 questions are linked. On the first one, sharing revenues and having a real EU budget: we need much more trust, otherwise it is perceived as a “transfer Union”, which goes only one way. There are steps before that: we need to create trust first.
The first step, which is the most important and urgent: the European Finance Minister should come, with a coordination part and then a budget part.
Our issue at present is this investment turf, it is the core of the European disease. Not only Europe, it is also present in the US, with stagnation. But it is especially European: this is the reason for the Juncker Plan and CMU.
Synergies should be created, for example: have a look at the financing of start-ups. We are very good at the beginning but very bad at the last stage. Usually at the last stage, successful European start-ups are sold to US buyers, because we don’t have strong private equity funds in Europe. We should organise together CMU and the Juncker Plan.
When you say “closer to the bone”, if you mean national reforms, strong reforms to stimulate the desire of investors, then yes. Equity financing for firms is very important. We need more business-friendly policies in order to increase our entrepreneurship. This is one of our weaknesses.
We have the next generation creating start-ups but we need reforms fostering entrepreneurship in Europe. If this is your point, I agree with you.