The Italian technocrat also warned that member states’ refusal to relinquish control of their domestic banking sectors risks exacerbating Europe’s financial subservience vis-à-vis the US.
The United States’ ownership of European citizens’ banking data and domination of global payment systems mean that the European Union is increasingly becoming a “financial colony” of the US, former Italian Prime Minister Enrico Letta said on Wednesday (2 October).
Letta, whose recent report on the single market is expected to heavily shape the EU policy debate in the next mandate, also warned that member states’ refusal to relinquish control of their domestic banking sectors to empower a cross-border European market risks exacerbating Europe’s financial subservience vis-à-vis the US.
“I think we are becoming more and more a colony in financial terms,” Letta said at an event hosted by Bruegel, a Brussels-based EU policy think-tank.
“What for me is strange is that all the different [EU] countries, there's a race to raise our national flag. [But this is akin to] raising our own flag as colonies," he said.
“So we have to work on our side and to leave the status of a colony, for instance, of the financial system and to integrate,” he added.
US platforms dominating payments market and financial data
The Italian politician, who currently chairs the Jacques Delors Institute in Paris, argued that digital financial transactions currently take place almost exclusively through US platforms - whether they are between European or US counterparties.
That also means that US firms’ control of digital payment systems not only allows them to extract hefty fees for processing EU-based transactions, but also facilitates their ownership of European citizens’ personal data, Letta argued.
“Data-based US platforms are owners of all our data, and we are a colony of them,” he said.
Letta's report, published in April, called on EU policymakers to bolster a European market for the financial sector - one of the key industries that had been left unaddressed at the time of the creation of the EU single market in the 1990s, alongside telecoms and energy. He suggested centralising financial supervision and harmonising tax and insolvency regimes, among other ideas....
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