Published by Global Banking and Finance Review
Posted on September 24, 2025
By Maria Martinez and Christian Kraemer
BERLIN (Reuters) -German Finance Minister Lars Klingbeil called on Wednesday for a more "modern" EU budget that channels funds into improving cross-border rail and road links, energy networks, external border security and research.
Klingbeil pressed a six-point plan to reboot the European Union's economy, including a "Buy European" approach on critical components such as advanced semiconductors as well as a single market for defence, with joint armaments projects.
"Europe stands at a crossroads today," Klingbeil said in a speech at the Hertie School in Berlin. "Either we pull ourselves together and move Europe forward, or Europe risks losing further relevance."
Under Chancellor Friedrich Merz, Germany, Europe's biggest economy, wants to take on a bigger leadership role in the EU as it deals with a less transatlantic-minded United States and the war in Ukraine, now in its fourth year.
“It angers me to see Europeans sitting at the kids’ table when it comes to the security future of our continent,” Klingbeil said, calling for an active role for the EU on peace talks.
EUROPEAN MULTILATERALISM AND FURTHER INTEGRATION
Klingbeil called for swift trade deals with partners including India and South America's Mercosur bloc in response to the Trump administration's tariff policies.
He called for a "Savings and Investment Union" to mobilise more private capital, arguing that a harmonised and high-performing European capital market is essential to help start-ups and scale-ups grow.
"Defending the status quo won’t get us anywhere," Klingbeil said. “As in Germany, Europe too needs investment and reforms.”
Klingbeil said that national go-it-alone approaches in implementing the EU's single market rules are increasing bureaucracy and fragmenting the common economic space shared by the 27 member states.
He also called for better mutual recognition of professional qualifications across borders to encourage labour mobility.
“Petty small‑state mentalities are our biggest barrier to investment,” Klingbeil said.
(Reporting by Maria Martinez and Christian Kraemer; Editing by Gareth Jones)
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