Foto: Artūrs Okuņs
Good morning, it is an honor to open this conference of business leaders, investors and policymakers as we all share a common conviction – that strong capital markets are not a luxury, but a necessity.
Economic and political stability is not something we can take for granted. We live in uncertain times. Russia’s brutal war against the sovereign state of Ukraine continues, the global geopolitical order and trade system are being transformed, technological developments are fast and traditional global financial system is under growing pressure.
In such a world, we, Europeans, need tools that bolster our resilience, strengthen our economic growth and capacity for self-financing our future - precisely what capital markets allow us to do. Our financing needs are immense. Draghi’s report puts the need for additional financing at close to 800 billion euro per year by 2030 to finance just our most urgent needs.
Given this backdrop, I have three key points to make today.
First, COMPLEMENTARITY. Public funding is critical to drive structural change and put Europe up to the task it must deliver for its citizens. But it should not be done and, in fact, can never be done by public funds alone. Public and private funding are complements, not substitutes. Much more of our private sector wealth must be invested into productive European investments alongside public funding.
Second, SCALE. True single market in financial services. We must deliver a fully operational Savings and Investment Union asap. Reduced hedges, fences and barriers within Europe to open up avenues for growth by reducing fragmentation that we have imposed ourselves upon ourselves. It is simplification and proportionality in our everyday actions and decisions.
Third, financial literacy is essential so that individual investors and corporates can make quality decisions.
So, where do we stand here in the Baltics?
There is recently good progress for the bond segment, but overall the Baltic capital markets remain underdeveloped. Equities are still waiting for a good story to be told. In my view, an economy without a well-functioning capital market is like an athlete competing on a low-calorie diet: he might hang in there for a while, but will not reach its peak. It is not all you need is chicken! An athlete cannot reach the podium by chicken alone. A balanced and nutritious diet is crucial. Similarly, a dynamic and resilient economy cannot rely on bank lending and bonds alone. We also need equity financing and non-bank financial sector.
Here, in the Baltics, we have laid much of the groundwork: reasonable fiscal policies, credible institutions, and an innovation record that far exceeds our size. Yet, our equity and debt markets remain shallower than our economies warrant. Our ecosystem is still evolving and it deserves a supportive boost from the public sector, for instance, by IPOs of public sector owned entities.
A strong Baltic capital market will not emerge overnight. But with persistence, regional cooperation, and the right policy framework and mindset, we can build a market that is resilient and distinctly Baltic: dynamic, innovative, open, and responsible.
Hence, we need your enthusiasm, your ambition and drive to deliver. Let us work together to deliver!
Thank you!