Taking a major step towards the development of a Capital Markets Union (CMU), the European Commission is promoting alternative sources of financing and removing barriers to cross-border investments.
While the CMU is expected to benefit all European Union member states, the Commission says it will particularly strengthen the Economic and Monetary Union by promoting private risk-sharing.
Building on progress already achieved since the launch of the CMU in 2015, the Commission on March 12 proposed to boost the cross-border market for investment funds, promote the EU market for covered bonds as a source of long-term finance and ensure greater certainty for investors in the context of cross-border transactions of securities and claims.
“Today’s proposals are part of a broader strategy to strengthen capital markets and encourage investments in the EU,” said Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union. “To have a genuine Capital Markets Union in Europe by 2019, we need to advance in three directions: European labels and passports for financial products, harmonised and simplified rules to deepen capital markets and more consistent and efficient supervision.”
According to a Commission press release, the CMU is one of the priorities to strengthen Europe’s economy and stimulate investments to create jobs.
As such, quick adoption of these proposals by the European Parliament and the Council will enable businesses and investors to benefit more fully from Single Market opportunities. The Commission has also called on the co-legislators to ensure the speedy adoption of pending key reforms for the completion of the CMU, such as proposals to strengthen capital market supervision, business restructuring and provide new savings opportunities for consumers.
Of the 12 proposals presented by the Commission to establish the building blocks of the CMU, only three have been agreed by the co-legislators at this stage.
“We want to make it easier and cheaper for companies, especially small and medium-sized ones, to get the financing they need,” explained Jyrki Katainen, Vice-President responsible for Jobs, Growth, Investment and Competitiveness. “A deepened single market will help companies to do that and will allow them to grow. The Commission is delivering on its commitment to put in place the building blocks of CMU. The European Parliament and Council must now do their part. The Commission stands ready to work with them to adopt all legislative proposals by 2019.”
In turn, Vera Jourová, Commissioner for Justice, Consumers and Gender Equality, said: “The new rules will facilitate access to credit by SMEs and promote cross-border investment. We want to provide legal certainty and remove legal risks in cross-border assignments of claims as well as in transactions that are important for SME funding.”