EU asks governments to tweak tax rules to keep ‘European dream’ alive

The Commission recommends that products that are too complex or too risky, such as crypto-assets, be excluded; and that no geographical restrictions, such as a European preference, are imposed.

However, a recurring concern among financial firms and governments is that American financial companies will take advantage of any such change.

Stéphane Boujnah, CEO of pan-European stock exchange Euronext, said that foreign financial players are looking “with gluttony at the European open bar.”

This summer, seven European countries — led by France — launched a European label for investment products with at least 70 percent of their portfolio assets invested in European companies.

Speaking of the initiative, Albuquerque said: “We have no evidence if that works.”

She added: “Having no geographical restrictions and having interesting tax incentives genuinely lead to a good outcome, and that good outcome translates into people having more opportunities.”

However, the financial services chief acknowledged there is a natural domestic bias when it comes to people choosing investment opportunities. “Diversification is important as a risk management tool … people should invest in different sectors, in different areas, and in different geographies,” she said. “But there is naturally a domestic bias, because we prefer to invest in what we know best, and typically we know best what is closer to us,” Albuquerque pointed out.

The commissioner said that EU financial firms as well have a role to play to ensure they get the most from the initiative. The financial sector needs to “come up to the challenge. We also need our markets to be developed. We also need more products,” she added. Obviously, it is up to investors to decide if they want to offer made-in-EU products.