Enrico Letta (Letta Report): Empowering the EU Single Market

Enrico Letta, former Prime Minister of Italy and author of the Letta report addressed the challenges facing the EU’s Single Market and emphasised the finance sector’s role in supporting Europe’s green and digital transitions at the Wealth Insurance Forum organised by WEALINS. Interview.

The single market seeks to guarantee the free movement of goods, capital, services, and people, known collectively as the "four freedoms". Given the current economic and political context specific to each Member State of the European Union, are you not afraid that protectionism will increase in the years to come and that some States will put their national interests before those of Europe? How can we strengthen this sense of belonging to Europe?

Enrico Letta: The risk of increasing protectionism and fragmentation is certainly real. We've already seen some tendencies in this direction over the past few years, both in response to the Covid crisis and the energy crisis triggered by Russia's aggression against Ukraine. However, even in this challenging context, the European Union has shown resilience against these impulses and has made significant strides toward deeper integration. Now, it is crucial to continue along this path, as the opportunities to do so are clearly within reach. The key is to focus on two main actions: first, to clearly highlight the tangible benefits that can be achieved through greater integration, as well as the costs of failing to integrate; and second, to develop a comprehensive plan that strikes a balance between the legitimate, diverse interests that exist across Europe.

According to your report, it appears essential to support the green and digital transition to empower the Single Market in the coming years. What role can stakeholders in the finance and insurance sector play?

E.L.: Stakeholders in the financial and insurance sector play a crucial role in building a more integrated financial market—one that is attractive to European investors and capable of channeling resources towards financing the EU’s major strategic goals, notably the green and digital transitions. In my report, I propose a bold step forward: the creation of a Savings and Investment Union, developed from the incomplete Capital Markets Union. Such an ambitious and strategic initiative, which will likely encounter resistance, cannot succeed without the strong engagement of financial and insurance sector stakeholders.

In a constantly changing environment, building a resilient single market to face new geopolitical tensions is essential. What would then be the strengths on which we must capitalise?

E.L.: The European Union possesses immense resources that remain underutilised. Our human capital is highly skilled, and we have an extensive research network capable of addressing the most pressing challenges. Additionally, our industrial landscape excels in strategic sectors, notably green technology. To safeguard these assets and prevent their exploitation by external powers, we must create an environment that fosters innovation and growth within Europe. This includes enabling businesses to scale up, so they can compete on equal terms with global giants from the U.S. and China, while preserving our unique social market economy model. By promoting the free movement of innovation-enabling factors and ensuring a dynamic business environment, we can retain Europe’s best talent and inspire them to drive transformative change here at home.