By Antonio García Del Riego, EESC Employers' Group member

Europe finds itself at a critical juncture as it faces historic challenges, from the green transition to war at its doorstep and intensifying global competition. Meeting these challenges will require more than policy declarations. It will require money and the ability to mobilise it, channel it, and multiply it. In short, it requires a strong, competitive and autonomous financial system. Unfortunately, that is not what we have.

Finance is the bloodstream of any modern economy. Every new factory, electric vehicle, hospital expansion or clean tech start-up depends on someone taking the risk to fund it. And in Europe, that 'someone' is often a bank. SMEs, which make up 99% of EU companies, depend overwhelmingly on bank credit to grow, invest, and export. Yet, the very institutions that form the core of our financing ecosystem are at risk of being outcompeted and overregulated.

Europe often talks about 'strategic autonomy' in energy, defence, and digital infrastructure, but rarely is financial autonomy part of the conversation. It should be.

Today, over 60% of investment banking in Europe is handled by just four American banks. The upcoming Basel IV rules will be applied in full in the EU, but not in the US, UK, or Japan. This asymmetry puts European banks at a competitive disadvantage. If we want European banks to finance the twin transitions and support strategic sectors, they must compete on equal footing.

The Capital Markets Union must move beyond rhetoric and become a true single market for savings and investments. To get there, we need smart, proportionate, and enabling regulation that protects stability and consumers, but also unleashes growth and competitiveness. This means:

• proportionality;
• technology-neutrality; and
• outcome-based rules.

Europe cannot afford to be naïve. In a world shaped increasingly by power politics and economic blocs, financial strength is sovereignty. The United States and China understand this. So should we.