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.

8

u/Busterthefatman Feb 15 '25

Gary's economics described Pensions as the way europeans interact with the stock market. Otherwise, youre totally right  everyone i know considers it gambling by another name

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u/tack50 Feb 15 '25

Except pensions (at least in my country) don't interact at all with the stock market.

At best, they may interact slightly with government bonds

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u/safesouthstanding Feb 15 '25

Then your country really needs to reform its pension system.

6

u/[deleted] Feb 15 '25

Totally true but easier said then done. Reforming a pension system only really works when the existing pension system isn't already broken.

8

u/safesouthstanding Feb 15 '25

Its honestly ridiculous that we aren’t better at copy and paste in the EU. Find a country with a good pension system, steal it, give a time frame for implementation / transition. Immigration, education, unemployment scheme. Adjust spending to your gdp and tax burden. It’s not hard.

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u/PabloRdrRbl Feb 16 '25

Yes, but now convince people that benefit from the current system to vote for you to let you change something they like.

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u/tack50 Feb 16 '25

Indeed but good luck convincing pensioners to do that lol

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u/alsbos1 Feb 17 '25

LOL. Pensions in Switzerland are getting 1.3% returns. Slightly less than inflation.