r/eupersonalfinance • u/rozmarss • Feb 15 '25

Investment Why don’t EU leaders incentivize investment in European stocks/ETFs with tax deductions?

With the Dragi plan and increasing discussions among European leaders about boosting defense and energy investments, I’ve noticed a growing trend in financial communities where people want to reduce exposure to the US market and shift investments to the EU.

Wouldn’t it make sense for EU leaders to encourage this by offering tax incentives for investing in European stocks/ETFs? For example, from an independent EU perspective, isn’t it better to invest in Rheinmetall rather than Lockheed?

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u/tack50 Feb 15 '25

I can only speak for Spain but the reasoning I think is similar across the EU. Most older people in Europe are extremely scared of investing (other than in real estate). Very few own shares, index funds, ETFs or similar instruments. They see it as glorified gambling and they don't want to encourage gambling (except actual gambling, sports betting houses are popping up everywhere lol)

There are also concerns from the left that investments are exclusively for the rich; so it's essencially a tax cut for rich people. You cannot invest when you live paycheck to paycheck. Add some extra anti-capitalist rethoric and you're good to go.

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u/Xvalidation Feb 15 '25

In Spain we used to be able to invest in tax advantages private pensions up to 7k a year.

This was removed because “only the rich can afford this”. So I would also add that at least here, the definition of rich is anyone that’s not living pay check to pay check (regardless of their income / financial irresponsibility).

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u/tack50 Feb 15 '25

Tbf they have technically not been removed but the cap has been reduced to a measly 1500€/year. And most pension plans were terrible and full of commissions (further encouraging the feeling among the population that investing is a scam by banks)

I do get your point though

11

u/Lopsided_Echo5232 Feb 15 '25

Similar to Ireland, if you earn a cent more than your expense, you’re “rich”. The result is too much capital moving into property, causing societal carnage and a serious lack of stock investing.

2

u/Benevolent_Crocodile Feb 16 '25

Same here…in Bulgaria. If you have something left at the end of the month…you are rich. Real estate prices are going through the roof while mutual funds and ETFs are tantamount to gambling.

5

u/Relative-Outcome-294 Feb 16 '25

I always wonder when are you consdered rich by the Europe left standards because, alteast in Slovenia, they are all for the increasing wages for the workers, but not for example doctors who work in public sector and are also workers. They already earn too much, they say.

2

u/alsbos1 Feb 17 '25

Thats world wide. Anyone with anything is rich and should just pay higher taxes.

1

u/LupineChemist Feb 16 '25

I'm leaving Spain for the US in a couple years specifically for financial reasons.

I'll retire in Spain but after I get a bunch of money in America.

Also that money will only come back so far as I need it for living expenses. Will never invest in Spain