00:00Europe has got a face at the moment. And I'm wondering what message you're bringing from the kind of the heart of European finance to London today about what Europe needs to do to compete with the AI boom that's happening in the States, the investment story that is going on there. What is the message?
00:15I think the message is that we have to keep up bridges, that we have to avoid the fragmentation of global trade. That is the message. And that Europe has to focus on itself to seize opportunities, but also to act as a bridge builder with other regions in the world.
00:36Europe should be open to the rest of the world. And I think we have to bring forward and to assure that growth will apply globally.
00:45The thing about Europe is, and you talk about Europe dealing with itself at the moment, Europe is this massive market, this rich market, this unbelievable story that isn't able from a finance point of view to be able to compete with what is happening in the United States.
00:57The US has this amazing financial market story that allows it to power its economy, to invest in its economy, to deliver innovation. Europe should have the same, but doesn't.
01:08And we continuously have this argument. You're the Luxembourg finance minister. What can we, why is it taking so long to get to that kind of a situation?
01:18Why don't we have cross-border banking? Why don't we have cross-border finance? Why don't we have all this stuff that would allow us to deliver the kind of economy we see stateside?
01:26I think you're rightly addressing the right issues. And we have to implement what has been outlined in the Draghi and Letta report.
01:35So to implement the savings and the investment union and to reduce red tape in Brussels, to have better regulation rather than more regulation, to work on common rules and to apply them with any gold plating in the different member states, to have a cross-border approach and to work together.
01:54Why don't we have it? Why is it taking so long?
01:57I think there should be more political pressure on the European Commission in Brussels.
02:02And that is what the head of governments are doing in the European Council.
02:07And that is also what the finance ministers are doing in the Eurogroup as well in the ECOFIN Council.
02:12Good morning, Minister. But aren't you yourself pushing back against some elements of that European project in the sense of common supervision, central supervision around specific financial markets?
02:25You're pushing back against that. You think there's a different problem, but you're pushing back against the urge to centrally supervise.
02:30You have to make the difference. We should work on competitiveness and competitiveness is common rules, applying them in a different, in an easy going way.
02:42And that is not reduced to an institutional question, which is linked to centralised supervision.
02:47Centralised supervision will add some more costs and we have to work more streamlined.
02:56That is also Luxembourg is advocating for. Luxembourg is advocating for a deeper and more integrated capital markets.
03:04And Luxembourg is advocating for convergence in controlling rules and that they apply in all the different member states in the European Union.
03:15Yeah. Does that stretch that call, does that stretch to stock exchanges?
03:20We've heard from the Germans that they've been calling for one stock exchange or at least raising the idea of having just one stock exchange for Europe.
03:26Is that something that Luxembourg takes a view on?
03:29We have listened to this proposal, but our general approach, I must say, is deepening as a capital markets union.
03:38And that is not a question of only one centralised supervision.
03:43That is the position of Luxembourg. And I think that is not as a position only of Luxembourg, but that is also shared by several other member states.
03:51And on the stock exchange, then you don't think that's a project particularly worth following?
03:55Every project is worth following. But finally, we have to find a compromise.
04:01And that is what we are discussing inside European institutions.
04:05And that is also that Luxembourg and others are discussing with the European Commission.
04:10Minister, you talk about being competitive, especially with the United States.
04:13But the United States is driving the next leg of growth with tax cuts, with subsidies, with government investment.
04:20European countries are not doing that at all.
04:23Are you talking to your peers at the Ecofin kind of group about lower taxation, about higher subsidies, about getting these budgets across the line?
04:33It feels like your primary goal to deal with that issue is simplification of rules, not adjusting some of these other policies.
04:40I think every country in the world, especially the UK, the US and of course the several member states of the European Union have to face huge challenges.
04:51Assuring investment, facing defence spending and also assuring social cohesion inside their countries.
05:00That is also a challenge I have to face. I have addressed the budget of the Luxembourgish government to the parliament one month ago.
05:08And we have not increased in that budget taxes. We consider to lower even some taxation as well for citizens, but also for business.
05:21Because this government started two years ago and openly said that we need more attractiveness, that we need more competitiveness in Luxembourg in order to effort for all the social expenditures.
05:33Forty six percent of the social expenditures of the total expenditures in the Luxembourg budget are addressed to social issues.
05:42So we put our strength on increasing growth rather than increasing taxes.
05:48Are you giving this advice to your to your peers in France, your peers in Spain, your peers in Italy?
05:53It is not up to me to command on the national situation of my peers.
05:59Everyone has to face, as I just outlined, huge issues.
06:04And of course, but minister, I'm sure to your point, though, some of the issues that are happening in some of your your neighbors are directly going to affect the economic situation of Luxembourg with or without taxes in your jurisdiction.
06:14Now that that is right. You know, Luxembourg normally serves as a gateway to other countries inside Europe, but also from outside Europe as a gateway to Europe.
06:26And of course, the political situation, the stability of the economic situation in our neighbor countries affects Luxembourg.
06:34And therefore, we are focusing in order to strengthen more and more our financial and banking center. Luxembourg is a cross border operating a financial center.
06:45We have more than seven point four trillion euros under management in Luxembourg.
06:50And that is our strength. And we would like to use these tools in order to serve also the European economy.
06:57Minister, can I ask you about another subject that might or might not be mentioned at ECOFIN this week, but certainly is on the European agenda.
07:03And that is frozen Russian assets and what to do with the money that is generated from them.
07:07Belgium has been pushing back against what other European leaders have been calling for.
07:12Do you expect a decision in December? Can we get to a decision? Can Belgium's concerns be faced?
07:20I think Europe has steadfast assistance to financing the Ukraine.
07:28There is a question which is dealt by the heads of state and government.
07:32But personally, I can understand the concerns of Belgium.
07:36Of course, we have to apply a rules based approach.
07:42That means that there must be safeguards.
07:46And therefore, I can understand the Belgian position.
07:49And for the timeline, I would say we would go ahead.
07:56And I am confident in the solution which fits the needs of all will be fine before the end of the year.
08:03Let's see ya.
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