Letta says his European rail vision hinges on completion of Capital Markets Union

At a debate on Tuesday (1 October), former Italian Prime Minister Enrico Letta said his vision of a pan-European high-speed rail network will only be realised if Europe delivers on its dream of a single market for investment and savings.

"We support railways, but if we cannot say something clear on how to finance it, it will remain [only] a very good expression of goodwill,” Letta said at Tuesday's debate, organised by the railway industry body CER and the Jacques Delors Institute.

Currently the president of the Jacques Delors Institute, Letta is the author of a high-profile April report which sets out how Europe can deepen its single market across several sectors, including both finance and transport.

On rail, his report advocates for creating a pan-European high-speed rail network and enhanced connectivity between rail systems across Europe.

At the event, Letta spoke of a new "momentum" behind European rail expansion and argued that this was, in part, a result of his report.

“I don't remember a moment in which we were able to discuss how to speed up, how to scale, how to relaunch the European investment on trains, railways and equipment for high speed trains at the European level like the one we have today,” he told the event.

But for Letta, this ambition can only be delivered with a deep revamp of Europe's wider finance framework.

Speaking to reporters after the event, Letta spoke of the "close link between (...) high speed train improvement and the creation of a (single) financial market in terms of private investments" and said that greater awareness of this link was the main outcome of Tuesday's event.

Savings and investment Union

Letta was referring to his 'savings and investment union' proposal, which is very similar to the EU's Capital Markets Union project, an initiative launched in September 2015 under then-Commission President Jean-Claude Juncker.

If successful, the initiative would allow a better flow of savings and investments across EU borders. It has received renewed attention from national and European leaders in recent years, as it could potentially unlock billions of additional euros of private investment to meet the continent's climate, industrial strategy and defence objectives.

However, progress in completing the capital markets union has been slow, and success is not guaranteed. Completion would require harmonising national financial regulations and more centralised European-level oversight – something national capitals have been reluctant to agree to.

Letta positioned his savings and investment union as a prerequisite for sufficient public as well as private investment into rail.

“If we cannot build up a strong integrated financial market at the European level in the next two years, it will be impossible to mobilise private investments. And without mobilising private investments, it will be impossible to convince all the 27 (EU countries) to put public money in a common box,” Letta added.

“If we are not able to have this leverage with private funding, my guess is that all the discussion about public funding will lead to frustration,” he told Euractiv.

[Edited by Donagh Cagney/Martina Monti]