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EU financial services chief Jonathan Hill published a long list of possible ways to build the CMU, sparking concern the plan could get bogged down in lengthy debate. "Beyond possible 'quick wins', it will be important to seek agreement on which other key actions should be dealt with as a matter of priority in order to create momentum for addressing some of the more difficult, long-standing barriers to the capital markets union in the long run", EU president Latvia said.
The need to set clear priorities is echoed by Bruegel, an influential EU affairs think tank in Brussels, which has also written a paper for the finance ministers. Bruegel proposes a staged process to "sustain the policy momentum", such as by agreeing an early and firm commitment on a limited number of key reforms. Bruegel recommends possibly delaying a separate, draft EU law on forcing banks to isolate trading activities for markets. Critics say the plans could harm market-making, a key mechanism for companies raising funds. More controversially, Bruegel says that plans by 11 eurozone countries for a tax on stock, bond and derivatives trades "may act as a brake on investment with detrimental economic consequences".
Strengthening the EU's European Securities and Markets Authority would also boost CMU plans, it said, a step that would raise British hackles. "European member states should instead focus their energies on harmonized taxation of savings, reforming the tax disadvantage given to equity relative to debt," Bruegel says in the paper. It recommends creating a new European Chief Accountant office to stamp out national differences in how accounting rules are applied. Accoun