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Moroccan PM Calls for Diversifying Resources

Moroccan Prime Minister Saadeddine Othmani gives a speech in Rabat, March 18, 2017. REUTERS/Stringer
Moroccan Prime Minister Saadeddine Othmani gives a speech in Rabat, March 18, 2017. REUTERS/Stringer
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Moroccan PM Calls for Diversifying Resources

Moroccan Prime Minister Saadeddine Othmani gives a speech in Rabat, March 18, 2017. REUTERS/Stringer
Moroccan Prime Minister Saadeddine Othmani gives a speech in Rabat, March 18, 2017. REUTERS/Stringer

Moroccan Prime Minister Saadeddine Othmani has called on the government to control expenditures and resort to innovative ways to fund investments in an attempt to ease financial pressures.

In a circular to cabinet ministers, Othmani said the government will suffer from an additional financial burden of around MAD28.5 billion (USD3 billion) due to the implementation of a deal struck with syndicates, which will cost MAD5.3 billion (USD560 million) in 2020.

The minister stressed the importance of intensifying efforts on improving taxation and non-taxation resources.

Othmani emphasized the necessity of carrying out important reforms including the comprehensive reform of retirement regulations and the gradual reform of compensation, along with activating mechanisms of social support.

He placed the country’s financial and economic well being on top of the government’s priorities in drafting the state budget for 2020.

Othmani noted that reinforcing stability and economic development is full of risks, despite huge efforts exerted by Morocco in the past years.

The prime minister urged reconsidering the way investment credits are managed by giving priority to projects backed by international donors and funds, and signed in the presence of King Mohammed VI.

Othmani called for enhancing public investments by adopting a new approach which will be activated gradually starting next year, and which aims at implementing more socially and economically lucrative projects, and to enhance implementation mechanisms, in addition to relying on innovative funding procedures by activating the new legal framework for public-private sector partnerships.

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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.