European Central Bank’s Lane outlines policy agenda including savings and investments union as global trade and capital flows shift

The European Central Bank published a policy contribution by Executive Board member Philip R. Lane for an IMF research conference panel, assessing how structural shifts in the world economy are affecting the euro area and setting out policy priorities to adapt. The presentation reviewed diagnostics on export and import dynamics, the current account and exchange-rate patterns, including indicators pointing to greater overlap between euro area and Chinese export specialisation and evidence of diminishing import intensity in China’s economic activity. It connected the Draghi and Letta reports’ pro-growth agenda and fiscal dynamics with the role of asset markets, arguing that faster growth and rising public debt increase the supply of European assets and require stronger asset demand, including from households and foreign investors. Lane highlighted elements of a “savings and investments union”, including measures to encourage retail participation (including SIAs and financial literacy), develop supplementary pensions (auto-enrolment, the IORP Directive and the PEPP Regulation), strengthen market integration and supervision, and promote equity investment by institutional investors (including the EuVECA Regulation), alongside continued work on banking union, possible EU-level bond supply, the international role of the euro, the digital euro and the ECB’s 2025 monetary policy strategy update.