29 October 2019

ECA: Auditors to look at the action taken by the Commission to foster an EU Capital Markets Union

The European Court of Auditors is assessing how successful the Commission’s action has been so far in building the Capital Markets Union, a major initiative launched in June 2015 as part of the “Juncker Plan”.

The free movement of capital is a key long-standing objective of the European Union, being one of the pillars of the European Single Market, along with the free movement of people, goods and services. An integrated capital market would complement banks as a more diversified source of financing, offering investors and savers additional opportunities to put their money to work and opening up new funding opportunities for all EU businesses, in particular start-ups and smaller companies. 

The Capital Markets Union (CMU) is a project launched in June 2015 by the Commission to ensure a free flow of private capital and to remove regulatory and other barriers in the EU. Despite some progress over the years, Europe's capital markets are still fragmented along national lines, and are not easily accessible to all would-be investors. Moreover, the EU’s economies rely heavily on the banking system as their major source of financing, and suffer when banks limit access to credit in difficult times — such as during the 2008 financial crisis. The Commission’s action plan aimed to set up the building blocks for a well-functioning and integrated Capital Markets Union by 2019. Work towards the CMU will remain one of the top priorities for the next Commissioner responsible for financial services, as barriers to the free flow of capital still exist. 

The auditors will examine, in particular, whether the Commission:

• has achieved its objective of increasing the diversification of funding sources for EU companies, especially for small and medium enterprises;
• has proposed measures to foster more integrated and deeper capital markets;
• is implementing the CMU in such a way that the measures of the action plan benefit businesses and domestic capital markets, in particular by making use of technical assistance and aligning the CMU actions with other EU programmes, where appropriate.

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