France and Germany Push for EU Economic Dynamism and Red-Tape Reduction

France and Germany advocate for a focus on reducing bureaucracy and unlocking investment funds in the EU. Their joint paper emphasizes unifying capital markets, simplifying financial regulation, and boosting public investment. They also urge the EU to maintain open but assertive trade policies in response to global protectionism.

France and Germany want the next European Commission to focus on cutting red-tape and unlocking billions of euros in private and public funds for investment, according to a joint paper on Thursday. The French and German economy ministries said in the paper that Europe must not fall behind and needs a "fresh economic dynamism in the next five years and all tools should be used to build it".

First on the list of priorities was speeding up work on unifying capital markets across the European Union, which currently are largely fragmented along national borders, hobbling investment flows. France and Germany, the EU's two biggest economies, called for financial market regulation to be simplified while making it easier to raise equity financing for companies and market cross-border investment and savings products for retail investors.

With the U.S. and Chinese governments providing massive support to firms to boost their competitiveness, the ministries said that public investment would also be key, though they offered few details about what form that could take. They also said the European Union must be more ambitious in tackling unnecessary bureaucracy by simplifying and fast-tracking administration procedures. They urged "reality checks" at the EU level to target specific bureaucratic blockages.

Eliminating red-tape has become a hot topic, with bureaucracy an easy target for far-right parties ahead of EU parliament elections in June. It also was a major gripe in farmers' protests in several EU countries earlier this year. The paper said that EU trade policy under the new European Commission should remain open, but assertive in the face of growing protectionist moves by other major economies.

"In order to ensure a global level playing field, trade defence instruments should be used consistently, where necessary, to effectively encounter unfair or abusive trade practices," the ministries said. The joint paper was agreed as a contribution to a broader ministerial meeting on Monday north of Berlin during a state visit to Germany by French President Emmanuel Macron.