German Chancellor Olaf Scholz said the European Union needs to tighten integration of its banking and finance sectors to bolster a transition to green technologies.
(Bloomberg) — German Chancellor Olaf Scholz said the European Union needs to tighten integration of its banking and finance sectors to bolster a transition to green technologies.
The completion of the bloc’s efforts to create a single market for banks and capital is needed for the EU to maintain competitiveness, Scholz said Thursday in a speech to lawmakers in Berlin, reinforcing the government’s position.
“A competitive European Union of course needs the completion of the capital markets and banking union,” Scholz said ahead of talks with EU counterparts in Brussels next week. “The task now is to strengthen the single market.”
Global financial markets have been rocked by a series of failures in recent days. After the collapse of Silicon Valley Bank, Credit Suisse Group AG came under pressure and tapped the Swiss National Bank for as much as 50 billion francs ($54 billion) as part of an effort to stem a crisis of confidence.
The EU’s plans for banking and capital markets integration aims to allow investment and savings to flow across the bloc to create a bigger market and lower the costs for banks to do business.
Germany has long stood in the way of the EU’s banking union by balking at joining a program to insure deposits across the world’s largest trading bloc. A guarantee scheme is the most ambitious pillar of the effort, and Berlin has demanded further risk reduction in banks’ balance sheets before covering deposits with joint instruments.
Last summer, euro-area finance ministers failed to agree on a calendar to complete the plan, as Germany demanded progress on other issues including limits in banks’ holdings of sovereign debt in addition to the progress already made in reducing their bad loans.
Scholz didn’t go into detail on his position in the speech.
The German chancellor said the EU needed to rally together to navigate the challenges ahead, including shifting industry toward climate-neutral technologies and securing critical raw materials.
“We in Europe must pull together, network our companies and promote strategically important technologies of the future,” he said. The rapid rampup of green technologies “must succeed.”
–With assistance from Jorge Valero.
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