This week, the EU Industry Days were held in Rzeszów, Poland. This is one of the EU’s most important annual events focused on industry. Ronald Wuijster was a guest there. In this column, he shares his experience based on the biggest issue on the table there, which is strengthening the European internal market.
“Our European internal market is a great thing. It leads to a broader choice of products and services for consumers, lower prices through economies of scale, and greater trading opportunities for businesses. It also allows people to travel, work and study freely. And it makes the EU a reliable haven for financiers, including institutional investors. At the same time, there is still considerable room for improvement. The questions I regularly ask myself are: why does our European market, with 450 million consumers, still have so many (investment) barriers? And why don’t we, like the US with 340 million citizens and their so-called Magnificent 7, know how to better utilize the potential of our scale?
Doing nothing is not an option
One thing is certain: we cannot continue doing what we have already been doing. Then we will fall hopelessly (further) behind as a European continent. Furthermore, we should not just say that we 'want' something either. Take, for example, 'wanting' to be an economic superpower that manages to grow prosperity and well-being among its citizens. No, it is not 'wanting to be' but 'wanting to become'. This includes being willing to take the risks that such choices demand. After all, nothing comes for nothing.
Former Prime Ministers Enrico Letta and Mario Draghi of Italy (the latter was the president of ECB between 2011 and 2020, ed.) presented reports in 2024 that led to a collective sense of urgency among policymakers in Europe. In his report “Much more than a Market,” Letta describes how to strengthen the European single market. In doing so, he does not shy away from many supporting policies. For example, he also advocates for a European solution with auto-enrollment to promote capital-backed savings for retirement. For his part, Draghi addresses the future of European competitiveness in "The future of European competitiveness”. According to Draghi, to improve that, 750 to 800 billion euros of additional annual public and private investment is needed, especially for the sustainable and digital transition. Draghi also advocates the introduction of a “common safe asset” (which should make European business less dependent on bank financing) and abandoning the conservative approach to risk (risk-averse behavior). Meanwhile, the urgency that these reports instilled in us seems to have faded somewhat. The fact remains that some issues can only be tackled at the European level. The most recent examples are our common themes of defense and security and adjacent sectors such as digital and physical infrastructure: from upgraded transportation infrastructure and new, sustainable barracks to drones and proprietary satellite systems. Here we should not pursue the narrow, national interest, but above all the European one. With the adage “Made in Europe and bought in Europe”.
We are all up to the task
As for the completion of the internal market, to which I explicitly include the Savings and Investment Union, it is mainly up to the European Commission to encourage member states to step over their own shadows. This can lead to new breakthroughs, such as the recent Key Actions To Dismantle The Terrible 10 Barriers initiative. This calls for an approach in which barriers are settled, sector by sector, from a unified and shared European perspective. Exactly as we now appear to be making rapid progress with similar investments in defense and security. And with a European Commission and ideally also the member states that stand for long-term, reliable and stable policy that investors can build on. So that every euro we manage to invest in the EU, both publicly and privately, will pay off in full.
More member states, following good examples like Sweden, Denmark and the Netherlands, should start ensuring that citizens in their countries get better access to the capital market. It also helps the European Commission when member states feel a sense of ownership of the problem and help shape the Savings and Investment Union. This can be achieved by providing citizens with better access to the capital market, as well as by fostering a more favorable investment climate. The two go hand in hand. The recent move by seven European finance ministers to make investing in their countries, including the Netherlands, easier for citizens through the introduction of European savings and investment accounts is a positive development in this regard. In the meantime, it is to be hoped that the next cabinet will make informed decisions and thus unlock the Netherlands, allowing for more investments to be made here as well. After all, both public and private investment in the Netherlands is lagging behind.
For their part, institutional investors also have their own responsibility. In Poland, for instance, APG is investing on behalf of its fund clients in a fiber optic network for 2.4 million households, in a major toll road connecting the port city of Gdansk to the north, and in various real estate projects. I am regularly asked whether APG could do more in a sector or country. That is often potentially possible, provided the preconditions are in place. That brings me to the importance of the entire financial ecosystem. The question of whether pension funds and their administrators, insurers, banks, venture capital, or some combination of these can 'do' more in the EU is not the point. If we can bring the entire ecosystem together more effectively, we all benefit. Let me back that up with an example. In a roundtable discussion at the invitation of Stéphane Séjourné (Vice President of the European Commission, see photo), I sat at the table with a range of public and private investors during the EU Industry Days. My appeal there was that each should try to transcend their own interests. As financial players, we all have a role to play in bringing the European market and economy to full maturity. It is not a zero-sum game, but a positive-sum game. For example, APG is working closely with European financial institutions such as the European Investment Bank, the European Investment Fund, and the European Innovation Council to develop new markets that can bring long-term added value to our economy and society. Indeed, continuous innovation is a crucial part of maintaining and enhancing European competitiveness. But that also requires an entrepreneurial spirit and corresponding courage to take risks. In this respect, we in Europe often tend to be (too) risk-averse. We will have to work on our willingness to accept more risk in a responsible way.
Walk the talk
When you land at the strategically located airport in Rzeszów, 100 km from the border with Ukraine, you see the arrangement of Patriot air defense missiles, which immediately gives a sense of urgency. A wake-up call, as it were. We need to feel this urgency throughout Europe, especially when discussing our future competitiveness. Especially now, with continuous geopolitical and economic swells that sometimes seem to come from all sides. And in which the EU, especially if we do not act together again and dare more, threatens to become a plaything. Hence, my plea to European and national policymakers to deepen European cooperation. Both in the field of the internal market, including the Savings and Investment Union, and in the promotion of innovation and associated risk acceptance, as well as the more independent guarantee of European defense and security.
EU cooperation was and is the best guarantee of renewed prosperity and well-being for us all. For institutional investors, this way forward provides the desired comfort of being able to anchor more responsibly in the EU. We must not only want it, but also dare to act. Let’s walk the talk!