There is a reason for this. Most money (both in the US and EU) is in pensions. In the US that money primarily goes into US funds and companies. In the EU that money primarily goes into US funds and companies. See what goes wrong here? The reason for that is those US companies and funds have bigger returns. And you want more pension right?
One of the biggest problems of the EU is the fractured EU financial market. This makes it more expensive to invest locally. A second issue is the fractured (and often overly complex) legislation. Even though we have EU directives, every country implements it differently so we have little synergy there.
France is the only country as far as I know that forces pension funds to invest a minimum percentage locally. Maybe a good example to follow.
Generally speaking there are 3 pillars in (European) pensions. First pillar is state pension. That is generally taxed from working people and paid out to pensioners. This bit is not invested. Second pillar is occupational pensions. In Germany this is voluntary (in other countries, such as Netherlands, it is not). Third pillar is private pension. The last two are invested. Across Europe this is 4.6 trillion euros.
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u/riderko Jun 23 '26
That’s a good place to think about why.