The session revolved around a fundamental question: why has Europe progressively fallen behind the United States in strategic weight and global reach, and what role do capital markets play in that gap? To address it, INCIPE welcomed one of the most experienced Spanish professionals in international finance. David Jiménez-Blanco holds a degree in Business and Economic Sciences from CUNEF and spent nearly 25 years in international investment banking, notably at Salomon Brothers, Goldman Sachs, and Merrill Lynch, where he served as Chairman and CEO of Merrill Lynch Capital Markets Spain and as a member of the Investment Banking Operating Committee for Europe, the Middle East, and Africa. He currently serves as Vice Chairman of the Board of Directors of BME and Chairman of BME Markets and Exchange, the former Madrid Stock Exchange, and sits on the Board of Directors of SIX Group, which operates Switzerland’s financial markets. He is also Chairman of the Fundación de Amigos de la Alhambra and of CUNEF University’s Advisory Board, and the author of Conversos, a work that reflects his deep interest in history and culture.
In his remarks, Jiménez-Blanco opened with a historical premise to frame the debate: much as the outcome of the 1532 Battle of Cajamarca was largely determined by centuries of prior development, the current gap between Europe and the United States reflects decisions accumulated over decades that now structurally shape the geostrategic autonomy of both blocs. He stressed that this autonomy ultimately depends on economic power, which in turn depends on something Europe mentions but fails to address with sufficient determination: the capacity of capital markets to finance growth, innovation, and defense.
In quantitative terms, Jiménez-Blanco noted that between 2000 and 2025 U.S. GDP went from being roughly equivalent to Europe’s to reaching 31 trillion dollars against Europe’s 22 trillion, a gap that has widened consistently since 2008. U.S. military spending is three times that of Europe in absolute terms, and it is sustainable simply because the country has a far more powerful economic engine behind it. At the center of that engine, he argued, are the capital markets: U.S. stock market capitalization stands at 180% of GDP, compared with less than 100% in Europe, and American pension funds hold more than 40 trillion dollars in assets versus 7 trillion in Europe, despite a European population one and a half times larger.
The speaker pointed out that the real problem is not simply the volume of savings but how they are allocated. American companies obtain 75% of their financing through capital markets and only 25% through bank credit, while in Europe that ratio is reversed. This translates into a far greater capacity to finance equity and long-term risk projects, which is precisely what enables innovation and the emergence of leading companies. He illustrated this difference by comparing the American “Magnificent Seven,” most of them founded around or after 2000, with their European counterparts, mostly leaders from earlier cycles that have not found the capital needed to scale to the level of their American peers. He cited Nvidia versus ASML, and Microsoft versus SAP, as examples of this asymmetry in scale.
Jiménez-Blanco attributed this difference largely to differing economic policy choices and welfare-state models. In Europe, the fact that the state handles pensions discourages private financial saving. Europeans save mainly in real estate and bank deposits, instruments that do not help finance growth companies. In the United States, by contrast, the need to save for retirement and health insurance—incentivized fiscally since 1978 through 401(k) accounts—has produced a capital market of incomparable scale. He noted that each model has its advantages and drawbacks, but that a side effect of the European model is a structural shortage of capital available for productive investment.
On the fragmentation of European markets, the speaker noted that, while it is a real problem, it cannot be solved from the top down alone. Unifying stock exchanges without first harmonizing 27 different sets of commercial, insolvency, and tax legislation would achieve little. Alongside market breadth, he stressed the importance of also working on depth at the national level, citing Sweden as an example: its individual savings accounts have led nearly half of the adult population to hold financial assets, making the country Europe’s leading generator of startups and enabling close to 250 IPOs over the past five years.
The session closed with a Q&A segment addressing topics such as the comparison with the Chinese model (which the speaker described as an alternative route for channeling massive capital into technology and defense, but through centralized planning), the risk of bubbles in American markets, the role of Spain’s financial system in European integration, capitalization models in Latin America, and the sustainability of Spain’s pension system. On this last point, Jiménez-Blanco noted that Spain has an actuarial pension liability equivalent to 500% of its GDP, against private assets that represent barely 10%, placing the system in a position of structural vulnerability shared, to varying degrees, with the European Union’s major economies.
The discussion made clear that the gap between Europe and the United States in capital markets is not a cyclical or purely financial phenomenon, but the result of decades of political and economic decisions whose consequences bear directly on the continent’s strategic and technological autonomy. As the speaker noted in closing, every year that goes by without a course correction pushes the goal a year further away.
Aranzazu Álvarez