I believe Europe should focus on its strengths and what we stand for in the world: an economic and political space that upholds legal certainty and dialogue – and a peace project. As the most populous country and economic powerhouse, Germany naturally plays a key role in the EU. The new German government will therefore be called upon in this regard as well.

I believe and hope that by now, everyone has realized that we truly need to take action to enhance the European Union's competitiveness. The US now has a government that is entirely focused on itself and strongly committed to America, its economy, and its businesses. In Europe, we have both the necessity and the opportunity to position ourselves better. The European Commission’s Competitiveness Compass is moving in the right direction – less bureaucracy, simpler rules. EU regulation already serves as a model in many areas, such as sustainable finance. However, our goal should not be merely to become world champions in regulation. At the same time, we should not underestimate ourselves. When Luxembourg for Finance engages with investors abroad, we are essentially always representing Europe as a financial hub – no financial institution comes to Luxembourg solely to do business in Luxembourg. In these discussions, such as those recently held in Asia, we can clearly see that Europe remains attractive to investors.

A possible solution is to reassess whether the balance between regulation and flexibility is appropriate. With Solvency ll, regulations for insurance companies have already been slightly relaxed to facilitate investments in green projects and infrastructure. In Europe, we should take a more goal-oriented approach to regulation rather than adopting a checklist mentality, where every step is rigidly defined in some rule. This approach stifles flexibility.

I’d like to highlight a positive example where the issue was resolved: Eltif.

The initial Eltif regulation was certainly well-intended, but the framework was too complex and not market-friendly. Institutional investors found it overly restrictive since they had other investment options. For retail and semi-professional investors, the product was not attractive or liquid enough. The European Commission listened to market participants and made improvements. Today, the Eltif has become more appealing for both institutional and private investors. A similar approach would be beneficial in other regulatory areas as well. We don’t always need to reinvent the wheel. The key is to identify and refine existing structures where necessary.

In my view, conducting a solid impact assessment is crucial. This is often lacking today. Take the supply chain directive, for example – no proper impact study was conducted. The argument that only large companies are affected by a regulation is too simplistic. In reality, large companies will pass down the requirements to smaller suppliers. This means that even the smallest subcontractor must comply. The costs affect the entire supply chain and can be immense for individual businesses. A thorough impact study beforehand would have highlighted this issue. Policymakers could then have considered alternative approaches to minimise costs while still achieving their goals.

Not at all. Countries like Thailand, Vietnam, and China will continue investing in the green transition, regardless of the political discourse in the US or Europe. Europe remains a pioneer in this field. The world looks to us as a role model. But of course, we must ask ourselves: Have we set the right priorities? Have we left enough flexibility in areas where the transition could progress the fastest?

That’s true. This is due to the employer-supported private retirement savings system through 401(k) plans. Nearly 60% of Americans own stocks. In Europe, we also need to encourage more people to invest. When we look at private savings in Europe, over 40% are held in bank accounts or as cash. These funds lose value every day due to inflation. Changing this requires adjustments on multiple levels. At the foundation of any investment culture is investor education.

We still have room for improvement. Just because a country has a major financial centre doesn’t automatically mean its population thinks in capital market terms or invests accordingly. But our government has explicitly prioritised financial education in its coalition agreement.

Well, the market has matured to some extent. The end-to-end issue is real – simply replicating processes digitally while maintaining parallel structures in the „real world“ yields little benefit. In Luxembourg, we are tackling this challenge by enabling native issuance and trading on DLT to minimize these parallel structures. The most recent Blockchain Law 4, passed by the Parliament in December, introduced a new type of service provider: the Monitoring Agent. The idea is that when issuing a bond on the blockchain, you no longer need both a Central Account Keeper and a Secondary Account Keeper – just the Monitoring Agent, which could be a bank, CFD, or investment firm. For the end investor, nothing changes – except that the process becomes more efficient, simpler, and overall beneficial. Franklin Templeton recently launched the first Tokenized Money Market Fund in Luxembourg, which operates on a public blockchain. This is a step in the right direction.

Absolutely. We need the Capital Markets Union. National barriers must be eliminated as much as possible. National approaches that go beyond European standards (gold-plating) only complicate matters – whether in insolvency law or the implementation of directives.

Take Eltif. It is fundamentally a European product. However, in France, regulations under the Code monétaire, and insurance laws, require that an Eltif must be a French fund if it is to be sold within an insurance product. This fragments the market again. But in capital markets, scale is key. Thinking nationally makes markets too small – even in Germany. I hope the new German government continues to adopt a European perspective. In Luxembourg, we have no choice but to think beyond our borders. This naturally positions us as a bridge-builder between our two major neighbours, Germany and France – a role that, in my view, is becoming even more important.