Now that it has received the final recommendations on the High-Level Forum on Capital Markets Union (CMU) (see EUROPE 12503/13), the European Commission can begin to properly develop its new Capital Markets Union action plan.
On Wednesday 24 June, EUROPE received a copy of a note from John Berrigan, the Director-General of the Commission's Directorate General for Financial Stability (FISMA), to the cabinet of Executive Vice-President, Valdis Dombrovskis, which sets out the Commission departments’ initial thoughts.
The preliminary work carried out by DG FISMA suggests that the policy actions in the action plan could be grouped into three sections: - how to help companies raise the funds they need to support recovery and growth; - how to make the EU a good and safe place for individuals to save and invest long-term; - how to create a truly integrated single market for capital.
The majority of the 19 actions proposed in this note are based on the High-Level Forum’s recommendations. These include the idea of setting up a ‘European Single Access Point’ for company information and for a legislative proposal amending the MiFID II Directive to reduce the administrative burden and information requirements for a subset of retail investors.
Some proposals have nevertheless been developed independently, such as a proposal for a legislative framework to protect and facilitate investments in 2021, or the suggestion that the Commission should assess, by 2022, the benefits of a system that requires banks to direct SMEs whose credit applications they have refused to alternative finance providers.
The text indicates that some proposals are still subject to differences of opinion within the Commission departments. This is especially the case with the proposal for a comprehensive review of the EU securitisation framework in 2021, particularly because an initiative on this issue is expected in July (see other news), or the suggestion about presenting a legislative proposal in 2022 on a common standardised system for reducing taxes at source, which is a source of disagreement between DG FISMA and DG TAXUD.
It is also interesting to note that the Commission departments believe that it would be more prudent not to propose any concrete actions on financial supervision in the action plan at the moment, but simply to note that supervisory convergence is an essential component of a well-integrated capital market.
The note observes that the discussion in the Forum on this issue has been “quite controversial”, and that Member States are still strongly opposed to reopening the review of the European Financial Supervisory Authorities during the current parliamentary term.
It should be noted that the document is a technical contribution by the Commission’s departments and cannot, at this stage, be regarded as setting out the Commission’s future policy direction.
Timetable and political momentum
The note also states that the CMU action plan is currently scheduled for adoption on 23 September, so that it can be discussed by EU finance ministers at their meeting on 5 October. These dates are clearly still subject to change.
The German Presidency of the Council of the EU has also reportedly already confirmed its willingness to work on Council of the EU conclusions on CMU, which could be adopted in December.
The note also stresses that the Council of the EU's acknowledgement that progress needs to be made on CMU, particularly in areas outside the Ecofin Council’s jurisdiction, such as insolvency, company law and, to a certain extent, pensions, would mean that work could be done “to build additional momentum behind CMU and advance more quickly on difficult files”.
The public consultation on the High-Level Forum’s final report on CMU is open until 30 June. Once responses to the consultation have been received, the Commission departments will prepare a first draft of the action plan, for presentation to the Executive Vice-President in early July. (Original version in French by Marion Fontana)