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Germany Pushes ‘Two-Speed’ Europe With Core Group of Six Economies

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Germany is advocating a “two-speed” European Union to overcome decision-making gridlock and strengthen the bloc’s economic and strategic autonomy. German Finance Minister Lars Klingbeil said a core group of countries should move faster on key policies, arguing that the EU needs new momentum to respond to growing geopolitical and economic challenges.

Klingbeil has invited finance ministers from France, Poland, Spain, Italy and the Netherlands to form a leading group of six economies, with an initial video meeting planned as a starting point. The proposal aims to boost Europe’s sovereignty, resilience and competitiveness, as EU economies seek to reduce reliance on imported critical raw materials and shield themselves from global trade fragmentation and tariff risks.

According to a letter seen by Reuters, the initiative includes a four-point agenda focusing on advancing the capital markets union, strengthening the international role of the euro, improving coordination on defence investment, and securing supplies of strategic raw materials. Klingbeil said faster progress in these areas is essential to make Europe stronger, more independent and better prepared for an increasingly unpredictable global environment.

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EU Struggles to Shift Savers From Cash as Investment Reforms Lag

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The European Union continues to face an uphill battle in encouraging households to move money from cash into investments, even after a decade of efforts toward a capital markets union. Despite more than 60 legislative proposals, progress has been slowed by national interests, political shifts and technical hurdles. As a result, Europeans continue to hoard cash, with savings in bank deposits reaching 12.1 trillion euros—about 30% of household wealth—far higher than in the United States. In Germany, the figure is even more striking, with over 40% of financial assets held in cash or deposits.

Alarmed by the continued fragmentation of capital markets, several EU countries—led by Spain—have launched a pilot project to introduce a “Finance Europe” label that would help savers identify investment products that support EU companies. Meanwhile, policymakers and think tanks are pushing to scale Italy’s successful Savings Investment Plan (PIR), which directs household savings toward local firms, into a broader EU-wide scheme. Such initiatives are part of the bloc’s broader Savings and Investments Union (SIU), set to be unveiled this week, which includes proposals to empower the European Securities and Markets Authority and ease cross-border barriers for asset managers.

However, cultural and trust-related obstacles remain significant. Many EU households remain risk-averse and skeptical of investment products, often citing low returns, high fees and lack of reliable financial guidance. Former ECB chief Mario Draghi noted that EU household wealth has grown much slower than in the U.S., partly due to low interest rates on deposits that fail to keep pace with inflation. As regulators push for greater integration, experts warn the SIU will fall short unless it addresses public distrust and simplifies investment pathways for ordinary savers.

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