The European Commission has published a new, ambitious Action Plan to boost the European Union’s Capital Markets Union (CMU) over the coming years.
The EU’s top priority is to ensure that Europe recovers from the unprecedented economic crisis caused by coronavirus. Developing the EU’s capital markets, and ensuring access to market financing, will be essential in this task.
Large and integrated capital markets will facilitate the EU’s recovery, making sure that businesses – in particular small and medium-sized businesses – have access to sources of funding and that European savers have the confidence to invest for their future. Vibrant capital markets will also support Europe’s green and digital transition, as well helping to create a more inclusive and resilient economy. The Capital Markets Union is also crucial to boost the international role of the euro.
the Action Plan has three key objectives:
- Ensuring that the EU’s economic recovery is green, digital, inclusive and resilient by making financing more accessible for European companies, in particular SMEs;
- Making the EU an even safer place for individuals to save and invest long-term;
- Integrating national capital markets into a genuine EU-wide single market for capital.
To do this, the Commission is putting forward sixteen targeted measures to make real progress to complete the CMU. Among the measures announced, the EU will:
- Create a single access point to company data for investors;
- Support insurers and banks to invest more in EU businesses;
- Strengthen investment protection to support more cross-border investment in the EU.
- Facilitate monitoring of pension adequacy across Europe;
- Make insolvency rules more harmonised or convergent;
- Push for progress in supervisory convergence and consistent application of the single rulebook for financial markets in the EU.
The CMU is not a goal in itself, but is essential for delivering on key economic policy objectives: the post-coronavirus recovery, an inclusive and resilient economy that works for all, the twin transition towards a digital and sustainable economy, and open strategic autonomy in a post-Brexit and increasingly complex world. Meeting these objectives requires massive investments that public money and traditional funding through bank lending alone cannot deliver. Only large, well-functioning and integrated capital markets can provide the scale of support needed to recover from the coronavirus crisis. Only a proper functioning CMU can mobilise and channel the enormous investment required to tackle the climate and environment challenges we face and support the digitalisation of our companies, so they remain competitive globally.