FECIF Editorial

When Canadian Prime Minister Mark Carney rose to address the World Economic Forum in Davos last month, the ensuing drama—his unflinching critique of great power coercion, Donald Trump's predictable fury—obscured what may prove his most consequential insight. Buried within his call for middle-power sovereignty was a deceptively simple observation: pension funds matter. Not merely for retirees, but for nations.

In an era when tariffs are leverage, supply chains are vulnerabilities, and financial infrastructure is weaponized, Carney argued, a country's pool of investable capital becomes an instrument of strategic autonomy. Canada's pension funds, among the world's largest and most sophisticated, give Ottawa agency that pure GDP figures do not capture. They are, in effect, soft power with compound returns.

For those of us on the eastern shore of the Atlantic, this observation should induce something between revelation and embarrassment.

Europe's Paradox

Europe does not lack for savings. Our households have accumulated substantial wealth. What we manifestly lack is the capacity to deploy that wealth toward our collective interests. The result is a paradox so glaring it borders on the absurd: a continent desperate for investment capital sits atop pools of savings that flow elsewhere.

The arithmetic is brutal. The Letta and Draghi reports, both commissioned by Brussels, estimate that hundreds of billions of euros annually are required to fund Europe's environmental and digital transitions—investments that are not optional luxuries but prerequisites for remaining competitive in the 21st century. Yet Europe's actual investment rates tell a different story: one of chronic underinvestment, anemic growth, mounting pension shortfalls, and constrained public finances. We are trapped in a death spiral of our own making.

Meanwhile, European savings—including long-term assets held by households for retirement, often advised by one of the 450,000 financial advisors our association represents—too often finance American technology giants, Asian manufacturing expansion, or sovereign debt with negative real yields. We are, in effect, funding everyone's future but our own.

The Agency Question

This brings us back to Carney's core argument. Sovereignty in the modern era is not merely about formal independence or even military capability. It is about agency—the capacity to chart one's course without subordination to others' interests. "You cannot live within the lie of mutual benefit through integration," Carney warned Davos, "when integration becomes the source of your subordination."

Apply this logic to capital flows and the implications are stark. A continent that cannot mobilize its own savings to fund its own transitions is not truly sovereign, regardless of what its treaties proclaim. It is structurally dependent, vulnerable to the decisions of foreign investors, foreign regulators, and foreign politicians who may or may not share European interests.

The question is whether European household savings—particularly pension savings—can become what they are in Canada: a source of collective agency rather than individual nest eggs disconnected from continental destiny.

Beyond Fiduciary Theater

The objection practically writes itself: fiduciary duty requires maximizing returns, not serving political agendas. This is true, necessary, and increasingly insufficient as a complete answer.

First, the notion that investing in Europe's future represents a sacrifice of returns assumes that European decline is inevitable—a counsel of despair masquerading as prudence. Strategic European investments in infrastructure, innovation, and energy security may well outperform alternatives once political risk is properly priced in a fragmenting world.

Second, fiduciary duty operates within a context. If Europe cannot fund its transitions, if our continent becomes progressively less competitive and more vulnerable to external coercion, the long-term value of European pensions will suffer regardless of how cleverly they were allocated in the short term. You cannot build retirement security on continental decline.

Third, the current system already reflects political choices—they are simply invisible ones. The regulatory fragmentation that prevents efficient capital allocation across Europe, the tax structures that incentivize certain investments over others, the failure to create genuine pan-European pension vehicles: these are all political decisions with profound economic consequences.

Our Responsibility

As financial advisors, we occupy the critical junction between individual financial security and collective economic power. We are not disinterested technicians optimizing algorithms. We are professionals whose daily decisions, aggregated across hundreds of thousands of client relationships, shape Europe's financial architecture.

This imposes responsibilities that transcend the traditional boundaries of our role. We must help clients understand that their retirement security and Europe's strategic autonomy are not competing interests but complementary imperatives. We must advocate for policy frameworks that enable pension savings to flow efficiently toward productive European investments without sacrificing the fiduciary standards our clients deserve. And we must contribute our expertise to developing investment structures capable of channelling household wealth toward continental renewal.

The Choice

Mark Carney concluded his Davos address with characteristic bluntness: "We are taking the sign out of the window. We know the old order is not coming back."

He is correct. The comfortable assumption that economic security can be achieved through integration into a benign global system is dead. What replaces it will be determined by choices made now, including choices about capital allocation.

Europe faces a binary future. We can continue scattering our savings to the winds, funding others' ambitions while our own competitive position erodes. Or we can recognize that household savings, properly mobilized, represent a strategic asset comparable to natural resources or geographic position—a form of power that middle powers can wield collectively even when they lack the scale to dominate individually.

Carney's warning to middle powers applies with particular force to questions of capital: "If we're not at the table, we're on the menu."

European savings should sit at the table. Whether they do is ultimately a question of political will, institutional design, and professional leadership. Our association, representing the advisors who guide these capital flows, cannot be absent from this discussion.

Sovereignty, we are learning, is not inherited. It is funded.

This editorial reflects the personal views of the Secretary-General and is intended to stimulate debate within our member associations.