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The Association for Financial Markets in Europe (AFME), in collaboration with eleven other European and international organisations, has today published the sixth edition of the 'Capital Markets Union – Key Performance Indicators' report, tracking the progress of Europe’s capital markets against nine key performance indicators.
This edition also coincides with the 30th anniversary of the Single Market. Here too, the data points show minimal change in the development of the EU's capital markets on a global scale.
Adam Farkas, Chief Executive of AFME, said: “All the planned measures from the CMU Action Plan of 2020 have now been delivered by the Commission and EU leaders earlier this year committed to finalising negotiations on any open CMU issues before the next EU elections. However, certain goals, such as rebalancing the EU's funding sources toward more market-based financing, channelling individual savings into productive investments, and integrating national capital markets to create a unified EU market have not yet materialised to any meaningful degree.
“It is clear that the financing structure of the EU economy will need to adapt, and at pace, if it is to support the EU’s significant and transformative investment needs, including the fast-approaching climate goals of 2030, as well as its demographic and competitiveness challenges.
“Ahead of the next legislative cycle commencing, a strategic discussion on the best way forward will take place within the Eurogroup to set out recommendations for the next Commission. These recommendations are highly anticipated by the capital markets industry. The growth of an integrated capital market for Europe must continue to be a key priority if the European Union is to achieve its dual goals of sustainable and digital economic transformation.”
The objective of this report remains to serve as a tool to navigate the landscape of the European Union's capital markets by
shedding light on both the promising areas of growth and the enduring challenges that confront the development of Europe's
capital markets. Indeed, this year’s report shows a mixed picture, revealing no discernible medium-term advancement in the
CMU metrics that our key performance indicators cover.
This edition also coincides with the 30th anniversary of the Single Market, offering another lens by which to assess the
progress made in advancing the development of the EU's capital markets over the past three decades. Unfortunately, the data
points are disappointing, showing minimal change in the development of the EU's capital markets on a global scale.
In April 2023, EU leaders committed to finalising negotiations on any remaining CMU issues before the next EU elections and
the European Commission has now formally delivered all the planned legislative and non-legislative measures outlined in
its second CMU Action Plan of 2020. This demonstrates the dedication of the EU Institutions to developing the EU’s capital
market capacity.
However, certain goals, such as rebalancing the EU's funding sources toward market-based financing, channelling individual
savings into productive investments, and integrating national capital markets to create a unified EU market have not yet
materialised, as indicated by the findings in this report. Several reasons contribute to this: policymakers at both domestic
and EU levels have understandably prioritised crisis response measures due to successive external shocks. Furthermore,
many of the CMU measures, even if finalised or nearing completion, will take several years to fully implement and see the
true impact.
At this stage in the policy cycle, it is challenging to undertake a meaningful and comprehensive assessment of what has been
achieved, and what remains to be done, via EU legislative measures to develop the EU’s capital market. It is nevertheless
already clear that the financing structure of the EU economy will need to adapt, and at pace, if it is to support the EU’s
significant transformative investment needs, including the fast-approaching climate goals of 2030, as well as its demographic
and competitiveness challenges.
As we approach the upcoming hiatus in the EU policymaking programme, it will be an important period allowing for
the identification of policy actions that can deliver the required transformational results. In this vein, the initiative of the
Eurogroup President to launch a strategic discussion within the Eurogroup, which will set out recommendations for the next
Commission on the development of the EU’s capital markets, is highly anticipated by the market participants contributing
to this report.
To conclude, I would like to express my appreciation to our contributors: the Alternative Credit Council, Business Angels
Europe, Climate Bonds Initiative, EBAN, EuropeanIssuers, EUROCROWD, EFAMA, European Investors, FESE, InvestEurope
and PensionsEurope. Together, we remain committed to advancing capital markets in the EU.