Enrico Letta, former Italian Prime Minister, is the father of the eponymous report on how to improve the single market in the European Union. A document that Brussels commissioned almost a year ago and that has been causing a lot of talk since it was made public this spring. And to understand the challenge that Europe is facing, Letta told the audience gathered at the last meeting of the Cercle d’Economia this week a significant anecdote. 

“Throughout my journey in 65 European cities and 400 meetings, I decided that I was going to travel by high-speed train. And I realized that it is almost impossible to travel between European capitals with this means of transport. We lack connectivity. From infrastructure to energy.” 

To reduce the fragmentation of the market, a weakness that the Old Continent has been dragging on for years and that has now become an essential challenge in the face of the strength not only of India and China but also due to the growing loss of ground with respect to the United States, Letta considers that greater integration of financial services must be prioritized. 

“We have the freedom of movement of goods, services and capital and of people. But we must add a fifth freedom: that of researching and innovating to increase productivity,” he said. And this would be achieved, in his opinion, precisely with a unitary financial scheme that allows attracting more investments and preventing savings from going to the United States or other places on the planet. 

“SMEs are not currently benefiting from the single market we have. There are still too many different legal and tax regimes. It is chaos,” she denounced. Hence his proposal: to create a European financial regime, like a passport, to which subjects can opt if they wish and which is accepted in the territory. And, above all, it does not mean the cancellation of national standards. But it overlaps with them. A system to also overcome local resistance that still persists in Europe. 

“It must be explained that these instruments benefit citizens and do not go against them. The energy and digital transition will have an enormous cost. We have to say how we are going to get the money. And the banking union, financial markets and even a certain fiscal harmonization are the tools that allow this leap to be made,” said the Italian. 

Enrico Letta now chairs the Jacques Delors Institute. He has said that the legendary former president of the Commission reminded him, while preparing his report, that European integration will be achieved not by introducing more competition, but more cohesion. “We must convey the message that this is in the common interest. Because otherwise we will leave the debate in the hands of the farmers’ protests, with whom I already had the opportunity to debate. Or, in the future, the discontent of workers in the automotive industry.”

Lettta has also advocated for the effective creation of European university networks to stimulate research and the implementation of a common defense system. “It is a shame that we have to buy 80% of the weapons we send to Ukraine from abroad, creating jobs in Michigan or Turkey,” she lamented. To do this, she even believes that a collaboration with the United Kingdom could be negotiated, despite Brexit. 

“We are in an emergency situation. We must act now. The four large European economies, Germany, France, Italy and Spain, already agree. If necessary, we must start with them without the consensus of other countries, especially those that insist on defending their fiscal privileges.” 

A new Europe for the challenges of the 21st century.