"The eurozone needs to look to the US example if it wants to compete more effectively for global investment."
This was stated by International Monetary Fund (IMF) Managing Director Kristalina Georgieva, 'Euronews' reported.
"The United States has a culture of trust. Europe has a culture of modesty," Georgieva said. "My advice to my fellow Europeans is: more confidence."
The IMF chief was speaking on a panel at the World Economic Forum's annual meeting in Davos, Switzerland, alongside leaders including the ECB's Christine Lagarde.
"The world is changing very fast and we are going through a huge technological transformation. Capital needs to have long legs and go where it will matter most. And if countries want to move forward, they need to be very aggressive in opening up opportunities for entrepreneurship," Georgieva said.
One area for improvement in the EU is progress on the single market, the IMF chief said, which would make it easier to compete with the US.
Currently, fragmented capital pools in the eurozone make it harder for investors to secure financing compared to the more streamlined structure in the US.
Country-specific laws are a barrier to cross-border investment, as they force companies to rely more on banks than private investors for loans.
The IMF's latest economic forecast projects global growth of 3.3% in 2025.
The group expects growth of 2.7% in the US and 1% in the eurozone.
Christine Lagarde, speaking alongside Georgieva, noted that the eurozone has a "huge amount of talent" and a "huge amount of savings."
Upbeat, she reiterated the message that inflation is already falling, as are interest rates, improving business and consumer confidence in the region.
A Trump presidency, she continued, could provide "great opportunities" for the eurozone.
However, Lagarde added that she was "realistic" about the challenges facing the eurozone, namely progress on banking union and capital markets union.
She added that policymakers need to do more to tackle red tape and excessive bureaucracy that hinder business activity. | BGNES
