JP Morgan CEO says EU needs to complete single market to rebuild its competitiveness 

Jamie Dimon praised Ireland as 'trying to get policy right' but said the wider European region has a competitiveness problem and it is falling behind the US

JPMorgan Chase & Co chief executive Jamie Dimon speaking at the event in Dublin on Thursday. Picture: Patrick Bolger/Bloomberg

The chief executive of one of the world’s largest banks has said that Europe needs to complete its move towards a complete single market, across numerous sectors, if it is seeking to rebuild its global competitiveness.

Jamie Dimon, the chief executive officer and chairman of JPMorgan Chase — one of the largest banks in the world — was in Dublin on Thursday attending an event hosted by Tánaiste Simon Harris at the Department of Foreign Affairs.

His company currently employs around 1,500 people across three cities in Ireland.

During a talk at the event, Mr Dimon was complimentary about Ireland praising in particular the Irish economy, economic policies, the education system, as the available workforce. He said: 

I use Ireland as an example of a country trying to get policy right — you only have a handful. Ireland, Singapore, South Korea.

However, when it comes to the wider European region, Mr Dimon said it has a competitiveness problem and it is falling behind the US.

He pointed out that Europe had 90% of the US’ gross domestic product per person 10 to 15 years ago and now that has slid to 65% with China becoming more of an economic force in the world.

When asked what can be done to address this issue, Mr Dimon said it is all in the Draghi report on EU Competitiveness which was published last year.

Basically, everything should be a single market. 

"To finish it in the single market also means common banks, common disclosure laws, common exchange, common transparency laws, climate,” he said.

Mr Dimon said the common banking part might be difficult because banks in Germany won’t want to be on the hook for if a bank fails in Ireland but it will help in the long-run.

"But if you want to help your system, you're going to have to change and there are ways to get around that.” 

Plans for a single capital markets union (CMU) across the EU has been in train for a decade but has been repeatedly delayed. 

The aim of the CMU is to get money — investments and savings — flowing across the EU so that it can benefit consumers, investors and companies, regardless of where they are located.

Mr Dimon was speaking as trade negotiations continue between the EU and the US. 

As it stands, tariffs on EU goods exported to the US are facing at least 10% tariffs but that could change by the August 1 deadline imposed by US president Donald Trump.

Speaking on the negotiations between the EU and US, Mr Dimon said an EU-US tariff framework “needs to get done” and that the goal should be to make Europe “stronger” as well as keep “America and Europe together”. He said: 

If you fragment the economic alliances, Europe eventually goes back to every country for itself. 

Mr Dimon added that 'America First' is fine as long as it isn’t 'America alone'.

Mr Dimon said that Trump did the “right thing to chicken out” of implementing the full tariffs he announced on April 2.

Recently Mr Trump has announced a 50% tariff on copper imports, a 50% tariff on imports from Brazil, as well as a potential 200% tariff on pharmaceutical imports which could be phased in over a few years. A tariff of this size could be a significant issue for Ireland as pharmaceuticals make up a significant portion of the country’s total exports.

Mr Dimon, who has run JPMorgan Chase for 19 years and is one of the most prominent chief executives in the US, has warned that he believes there is a “complacency in the market” when it comes to these tariff announcements and they are a “little desensitised" to them.

He also warned that inflation could once again become a problem in the US and he wouldn’t rule out interest rates going higher.

Mr Dimon said the US borrowed $10 trillion (€8.55tn) during the pandemic and spent it which is inflation in itself but adding on top of that the inflationary effects of tariffs, changes in global demographics, as well as restructuring international trade.

He said the possibility of US interest rates actually going up is actually higher than people currently think it is.

“The market is pricing a 20% chance, I would price in a 40-50% chance. I would put that as a cause for concern,” he said.