The issue of the euro´s internationalisation recently gave signs of life. The EU Commission sent for on the 13th Feb a Staff Note to the Eurogroup (the meeting of the Finance Ministers of the Euro area member countries) titled “Strengthening the international role of the euro” #_edn1. The document has useful content, but it´s not clear enough about the need for a true Capital Markets Union, a project launched by the Commission in 2015 that never really progressed and was recently toned down to the Savings and Investment Union. In this project, the need to integrate the European bond markets around a sizable, pan-European safe asset is not even mentioned. Still, the lack of ambition is just a reflection of the absence of political will to take the main goal seriously. The document repeats the misleading claim that the Savings and Investment Union is about increasing the efficiency of European capital markets to prevent Europeans from sending their savings abroad for better returns. This notion has been repeated in all official Reports, totally ignoring the fact that the macroeconomic policy regime imposed in Europe leads to a surplus in its external Current Account (≈ 3% of GDP!), which, by definition, implies that the Euro Area is an exporter of capital, applying savings abroad and having a deficit in its Financial Account ( the Capital Account of old). The sending of net savings abroad is a macroeconomic issue, and not a matter of microeconomic efficiency.

 Still, it´s important that the Staff Note (not explicitly endorsed by the Commission) was sent to Ministers with such a clear title, something that didn´t happen since the 2018 Commission Communication sent to the European Summit with the same title.#_edn2 Some marginal decisions will certainly contribute positively to the final objective. See my complete Post at vconstancio.substack.co…

Footnotes:

#_ednref1 Find it at consilium.europa.eu/med…

#_ednref2 Find it at