At the 'Economic and Financial Affairs' Council on Tuesday 23 May, the Finance Ministers of the member states approved the roadmap proposed by the Commission in its report on lifting the national barriers to capital flows by 2019, to speed up completion of the Capital Markets Union (CMU).
“Creating a real Capital Market Union lies not only at the EU level. Member states have an essential role to play. There are still barriers to capital flows that have nothing to do with EU law and which need to be removed at the national level”, the European Commission for Financial Services, Valdis Dombrovskis, told a press conference.
The Commission's roadmap identifies the barriers to be overcome and measures to be set in place to facilitate cross-border investment within the EU.
For instance, the member states are called upon to continue the revision of their national rules to facilitate the cross-border distribution of investment funds. More specifically, they need to move towards regulatory convergence on pre-marketing and reverse solicitation and ensure that all costs related to fund notification are published and available for consultation on a single website.
The member states must also to remove the residence requirements for managers residing within the EU where these are “unjustified” and “disproportionate”.
Withholding tax procedures will also be assessed by the member states, which will agree on a list of best practices and contribute to drafting a code of conduct on the principles of rebates on withholding tax.
Removing national barriers will be one of the focal points of the mid-term review of the CMU, to be presented by the Commission on 7 June (see EUROPE 11793).
The finance ministers also held an exchange of views on the report by the Economic and Financial Committee of the Council of the EU on movements of capital. Although it acknowledges the progress made in improving access to the capital markets, it also notes that the level of financial integration remains below pre-crisis levels.
Dombrovskis said that the report shows that there is much still to be done to support economic growth and make the EU an attractive destination for investments. (Original version in French by Marion Fontana)