The Draghi and Letta reports paint a dire picture of declining financial competitiveness in the EU, highlighting concerns about sluggish growth, fragmented capital markets and regulatory constraints that are hampering Europe’s ability to compete with other global financial centres. Faced with increasingly intense international competition, the European Union is at a crossroads: adapt and evolve or risk falling further behind as other markets develop.
In this context, Luxembourg’s financial centre is more indispensable than ever. For decades, it has acted as Europe’s trusted gateway to capital, a place where global investors find security and efficiency to access the continent’s opportunities, and where European capital can connect to global markets. Luxembourg’s financial centre has achieved this position through consistent excellence in cross-border finance, an adaptable regulatory framework and rare political stability that provide investors with predictability in a volatile world. Today, as Europe struggles to maintain its growth and competitiveness, Luxembourg’s role as an international financial hub is not just an asset – it is a necessity.
One of Luxembourg’s strengths lies in its ability to attract inward capital and facilitate outward investment with equal efficiency. At a time when the European economy is striving for sustainable growth, digital transformation and infrastructure development, Luxembourg plays a vital role as a financing channel to help realise these ambitions. For global investors, Luxembourg offers a reliable gateway, combining stability and efficiency, to channel capital towards key projects such as the sustainable transition, digital infrastructure and affordable housing – all areas that have tangible benefits for the EU economy as a whole.
Luxembourg’s financial centre is not just an intermediary; it embodies the principles of a Savings and Investment Union. With its unique expertise, Luxembourg already serves the entire European Union, and not just a domestic market, by becoming a working model of what the Savings and Investment Union aims to achieve. As the EU works towards deeper financial integration, Luxembourg’s existing ecosystem – based among other things on a robust securitisation framework, a comprehensive capital markets infrastructure, forward-looking legislation, as well as leadership and expertise in UCITS and AIF funds – demonstrates that the foundations of a more unified European financial market are already in place. Luxembourg’s financial centre is part of the solution to unlock the full potential of European capital markets.
In current and future discussions on a more competitive and resilient European Union, we must avoid the pitfalls of intra-European introspection. We must pursue the objective of developing EU capital markets while increasing both sources of financing for European companies and investment and savings options for European citizens. But in doing so, we must also ensure that the European Single Market remains attractive to companies from outside and maintain access to global capital. There is no reason why the €800 billion of additional investment per year, mentioned in the Draghi report, must come exclusively from within the EU.
Luxembourg’s international orientation also provides access to capital and investment opportunities in the other direction, supporting European investors looking to engage in global markets. The country’s toolbox of investment instruments offers European investors the opportunity to diversify into high-growth regions, from Asia to North America. In a competitive world, Luxembourg has positioned itself as Europe’s bridge to global capital, supporting European companies as they seek to expand their reach beyond the continent, seize new opportunities and leverage capital in transforming markets.
In an increasingly fragmented Europe, Luxembourg’s financial expertise and stable governance provide a reliable basis for inbound and outbound investment.