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The declaration, which was adopted following intensive discussions at the German-speaking finance ministers’ meeting, includes a series of key measures that are intended to be decisive for Europe’s future positioning on the global market. The focus is on promoting innovation and technology, strengthening the capital markets, and reducing bureaucratic hurdles.
Private capital and innovative strength as the key to competitiveness
One of the central messages of the Lake Constance Declaration is the need to mobilize private capital to secure Europe’s economic strength. Austria’s Finance Minister Magnus Brunner emphasized that the challenges facing Europe cannot be overcome by public budgets alone. “The days of the fully comprehensive state must be over,” said Brunner. This underlines the urgency of creating incentives for private investment and at the same time reducing bureaucratic hurdles to keep capital in Europe.
The importance of innovation and technology was particularly emphasized. According to the declaration, Europe and its highly developed economies should use their innovative strength to lead the way in future markets such as climate and biotechnology. This is essential to survive in global value chains and strengthen Europe’s economic resilience.
Strengthening the capital market and sustainable financial management
Another focus of the declaration is on strengthening the European capital markets. The ministers see this as a decisive factor in financing the green transformation of the economy and promoting private investment. Christian Lindner, the German Finance Minister, pointed out the need to regulate the capital markets so that they remain both open and stable. This is crucial to keeping Europe competitive in the global market.
Sustainable budget management was also discussed. Following the crises of recent years, the ministers emphasized the importance of rebalancing national budgets and building up fiscal buffers. This is necessary to better counter future crises and secure the economic scope of action of the states.
Cross-border cooperation and solidarity with Ukraine
The Lake Constance Declaration also underlines the importance of cross-border cooperation between European economies. “Our countries have individual strengths from which the others can learn,” the declaration states. This potential should be used to strengthen Europe as an economic area and secure prosperity.
In conclusion, the finance ministers reaffirmed their solidarity with Ukraine and emphasized their intention to continue to support the country in its difficult situation. This support is essential to maintain Ukraine’s state institutions and enable reconstruction.
Core content of the declaration
The Lake Constance Declaration was adopted by the finance ministers of Luxembourg, Switzerland, Liechtenstein, Germany, and Austria on August 13, 2024, in Lochau, Austria. It emphasizes the need for a holistic financial and economic policy to strengthen Europe’s competitiveness in the face of global challenges such as geopolitical changes, productivity gaps, and demographic change. The declaration was only adopted in German. Important points of the declaration include:
- Promoting innovation: Europe should focus on future markets such as climate and biotechnology to act as a market leader. This requires investment in research and structural reforms to improve competitiveness.
- Strengthening the European Economic Area: European markets should attract private capital and increase competitiveness through openness and cooperation.
- Reducing dependencies: Diversification of trade relations is sought to minimize the vulnerability of national economies.
- Reducing bureaucracy and digitalization: More efficient administrative processes should reduce the burden on the economy and increase competitiveness.
- Stability of the financial market: A stable and competitive capital market should promote investment in important future projects.
- Future-oriented public finances: After the crisis, balanced budgets should be aimed to restore fiscal room for maneuver.
- Focus on productivity: Technological progress is to be promoted through improved framework conditions for start-ups and investments.
- Cross-border cooperation: The countries want to use their individual strengths to learn from each other.
- Support for Ukraine: Solidarity with Ukraine is reaffirmed in order to support its state functionality and reconstruction.
- International tax cooperation: Attention is paid to fair competitive conditions in taxation, particularly in the area of the digitalized economy.
The declaration thus sets clear priorities for economic policy cooperation in Europe in order to effectively tackle challenges and ensure the future viability of European economies. The Lake Constance Declaration marks a significant step in the cooperation between the German-speaking countries and provides an important impetus for the future of Europe. It shows that the challenges of the future can only be mastered through united efforts and a consistent economic policy orientation.
BMF