The leaders of euro area countries will be sending out a strong message on the importance of strengthening the Capital Markets Union (CMU) at a euro area summit on Friday 22 March. They will review the macroeconomic situation in the euro area and recommend strong coordination in the implementation of economic and budgetary policies.
In the presence of the President of the ECB, Christine Lagarde, and the President of Eurogroup, Paschal Donohoe, the twenty euro area countries will reiterate their “strong determination” to make “decisive progress” towards a deeper Capital Markets Union in the European Union, in the words of the President of the European Council, Charles Michel, in his invitation letter sent to the European leaders on Tuesday 19 March.
If we have efficient capital markets, we will be able to finance our transition in terms of defence, energy and digital technology, noted a European source on Wednesday 20 March.
This expected progress will be based on the recent Eurogroup statement, which sets out avenues of work aimed at further integrating capital markets in the EU and mobilising private savings to finance investment in the climate and digital transitions (see EUROPE 13368/3).
Three main areas are envisaged: - strengthening the financial architecture to remove barriers to European integration; - facilitating companies’ access to capital markets; - introducing incentives to increase the participation of retail investors.
This is a complicated file, touching on issues of “supervision” and “solvency”, but leaders want to “push to provide a framework for SMEs to get access to funding”, said a European source on Tuesday.
In a letter to euro area leaders, Mr Donohoe points out that the Eurogroup is recommending a restrictive fiscal stance in 2024 and a slightly contractionary stance in 2025. This positioning is appropriate with a view to the implementation of the revised Stability Pact from 2025 onwards, he stresses.
See the Eurogroup letter: https://aeur.eu/f/bei (Original version in French by Mathieu Bion with the editorial staff)