On January 28, the European Commission kicked off its project to create a Capital Markets Union (CMU) for all 28 EU Member States with a first orientation debate at the College of Commissioners. The CMU is one of the flagship projects of this Commission and ties in with the ambition to boost jobs and growth in the EU. It is designed to help businesses to tap into diverse sources of capital from anywhere in the EU and offer investors and savers additional opportunities to put their money to work. It aims to create a single market for capital for all 28 Member States by removing barriers to cross-border investment and lower costs of funding within the EU. Well-functioning capital markets will also facilitate the mobilisation of private financing in the context of the Investment Plan for Europe.
„A Capital Markets Union will ensure greater diversification in the funding of the economy and cut the cost of raising capital for companies. It should open up new funding avenues for all of Europe’s businesses, be they big or small. As such, the Capital Markets Union will help support and extend the Investment Plan for Europe, one of our top priorities,” said Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness.
„One of the key challenges Europe faces is to get investment flowing to support jobs and growth. A true single market for capital in all 28 Member States would help support that goal by linking savers and investors with businesses, big and small, that want to grow. It would also help broaden sources of funding, complementing the important contribution already made to our economy by the banking system. We need to identify the barriers that are stopping capital from flowing and work out how to knock them down one by one. That will be the purpose of the Green Paper we will launch in a few weeks’ time,” said Commissioner Jonathan Hill, responsible for Financial Stability, Financial Services and Capital Markets Union.
In many parts of Europe, especially SMEs remain heavily reliant on banks for their funding needs. A key objective of the CMU will be to diversify and extend sources of funding so that businesses have easier access to credit through capital markets as well as banks, and we need to boost the cross border dimension of access to funding.
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