DUBLIN (AP) — With many of the European Union's economies mired in stagnation, EU officials are seeking to emulate part of the U.S. model for creating growth and jobs by fostering more private investment in businesses.
Irish Finance Minister Michael Noonan said Saturday that in the United States banks account for only 25 percent of external financing for businesses. In Europe, he said, the proportion is the opposite — 70 to 75 percent of business financing comes from banks. He spoke at the conclusion of a two-day meeting of EU finance ministers in Dublin.
"There was a shared view that we must begin to take tangible action to assist in developing a more balanced financial system in which banks, institutional investors and public authorities all play a role in supporting long-term investment in growth and jobs," Noonan said.
This is important, he said, as many small and medium-sized businesses in the EU lack access to capital. Because Ireland currently holds the EU's rotating six-month presidency, Noonan chaired the meeting.
In January, unemployment across the 17 EU countries that use the euro hit a record 11.9 percent, with nearly 19 million people out of work. The unemployment rate for young people was 24.2 percent. And the European Commission, the EU's executive arm, predicts the unemployment rate will rise further this year.
The finance ministers also agreed to push for completion of a banking union that would create a single set of rules for banks in the union, a single supervisory mechanism and uniform procedures for winding down banks that fail. And they renewed their pledge to work together to fight tax evasion — a practice they said many people found particularly galling at a time when government cutbacks and tax increases are wreaking havoc with their personal finances.
Don Melvin can be reached at https://twitter.com/Don_Melvin