Several top German and French economic advisors have called for renewed efforts to boost the European Union's capital markets and encourage more private investment in a joint statement on Thursday.
"Like most advanced economies, the EU is suffering from
a long-term decline in growth potential. New opportunities
like the green transition or the rise of artificial intelligence have emerged, but our capacity to fund the investments and benefit from these opportunities remains uncertain," said the French Council of Economic Analysis (CAE), the German Council of Economic Experts (GCEE) and the Franco-German Council of Economic Experts (FGCEE).
"We need to build a stronger, deeper capital market to face these challenges," the statement said.
Currently, private households in Europe predominantly hold their savings in low-return asset classes such as bank deposits, the groups said in the statement.
The EU is seeking to attract more regular people to invest in local financial markets to make more capital available for the green and digital transition, as well as boost investment in private companies and start-ups.
To this end, work has been under way for years to bring the European Union's capital and financial markets together in what has been termed the capital markets union (CMU).
The aim is to reduce bureaucratic hurdles between EU countries in order to give companies more opportunities to raise money across the bloc.
After years without much progress, leaders of EU countries recently spoke out again in favour of pushing the project forward in order to boost the EU's global competitiveness.
According to a report published in April, there are €33 trillion ($36 trillion) in private savings in the EU, most of which is held in cash and bank deposits.