18 February 2015

Unlocking Funding for Europe's Growth - European Commission consults on Capital Markets Union

The European Commission launched its landmark project to unlock funding for Europe’s businesses and to boost growth in the EU’s 28 Member States with the creation of a true single market for capital.

The Capital Markets Union aims to break down the barriers that are blocking cross-border investments in the EU and preventing businesses from getting access to finance. The current environment is tough for businesses that remain heavily reliant on banks and relatively less on capital markets. The opposite is true in other parts of the world. One example of the opportunities a fully functioning single market for capital could offer: if EU venture capital markets were as deep as the US, as much as 90 billion euro more in funds would have been available to companies between 2008 and 2013.

With the CMU, the Commission also wants to clear obstacles that are preventing those who need financing from reaching investors and make the system for channelling those funds – the investment chain – as efficient as possible.

On Wednesday, the Commission launched a three-month consultation round, known as a Green Paper, the outcome of which will shape an Action Plan to help unlock non-bank funding so that start-ups can thrive and larger companies can expand further. The CMU is a long-term project that will require sustained effort over many years although early progress can also be made in some areas in the coming months.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness said: "Capital Markets Union is the first structural initiative that the Commission puts forward under the investment plan. It will contribute to ensuring that the investment plan is more than a one-off push and has a durable positive impact on economic conditions in Europe."

“The direction we need to take is clear: to build a single market for capital from the bottom up, identifying barriers and knocking them down one by one. Capital Markets Union is about unlocking liquidity that is abundant, but currently frozen, and putting it to work in support of Europe's businesses, and particularly SMEs,” said EU Commissioner Jonathan Hill, responsible for Financial Stability, Financial Services and Capital Markets Union. “The free flow of capital was one of the fundamental principles on which the EU was built. More than fifty years on from the Treaty of Rome, let us seize that opportunity to turn that vision into reality.”

Full press release

Green Paper

Q&A on Green Paper

Website on CMU

Consultation on Prospectus Directive

Consultation on Securitisation

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