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A Capital-Markets Union Is the Key to Greening Europe

In the absence of a true capital-markets and banking union, the European Union will not be able to mobilize the financing it needs to support its green, digital transformation. Europeans must once again turn a crisis into an impetus for deeper integration.

BRUSSELS – Jean Monnet, an architect of the European Union, once said that European unity “will be forged in crises, and will be the sum of the solutions adopted for those crises.” The past decade and a half has provided further confirmation of Monnet’s prediction. Contrary to forecasts by many eminent economists, the EU Economic and Monetary Union survived the euro debt crisis and is still going strong, thanks to the European Stability Mechanism. The Juncker Plan helped put the European economy back on track, and Brexit, far from breaking the EU apart, drew it closer together.

The EU is again proving its worth in the COVID-19 pandemic. BioNTech’s outstanding researchers developed a leading vaccine in record time, and joint purchases made it possible to distribute vaccines fairly and effectively (despite some initial difficulties), ensuring relatively high vaccination rates in many EU member states. The recovery plan and the European Guarantee Fund are now helping economically weaker states and regions to cope with the consequences of the pandemic.

Since 2000, the EU has repeatedly demonstrated its capacity to deliver solutions and show solidarity. But the never-ending search for quick fixes to acute crises has a major downside: the completion of the European single market has fallen to the bottom of the political agenda. Such EU-level issues played no role in this year’s German election campaign, even though a strengthening of the single market is crucial for confronting increased economic competition from the United States and China.

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