On Monday 2 September, Alexandra Jour-Schroeder, Deputy Director-General of the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), stressed the importance of ensuring the quality of reforms aimed at strengthening the EU’s competitiveness through the integration of capital markets.
“We certainly do not need to compromise solutions in these rather open, complex files for the sake of the compromise”, she said at a conference organised by the Italian-German Villa Vigoni Centre in Brussels on Monday evening.
The senior German official referred in particular to the progress made on the directive aimed at harmonising certain aspects of insolvency law (see EUROPE 13432/10), expressing her concern that the current negotiations are moving a bit “in the wrong direction”, with something “that is probably less than more”.
With regard to the Retail Investment Strategy (see EUROPE 13397/3), Ms Jour-Schroeder stressed the importance of simplifying the rules to encourage the participation of capital holders.
“If you really want to make the shift and have more retail investors in Europe, we should in the end not end up with an even more complex set of rules, as we have today”, she said.
From the 2020 action plan to today. The expert discussed the results of the action plan launched in 2020 by the European Commission to implement a Capital Markets Union (CMU). It included three key objectives: - support a green, digital, inclusive and resilient economic recovery by making finance more accessible to European businesses; - make the EU an even safer place for private long-term savings and investment; - integrate national capital markets into a genuine single market.
“We have not really managed to address more structural challenges in competitiveness, and those are linked to market fragmentation, but also in divergences more in the area of company securities and insolvency laws”, said Ms Jour-Schroeder.
The senior official also reiterated that the European Commission will remain vigilant regarding the implementation of initiatives already launched, stressing that “the clock is ticking”.
“We have a good political momentum, but that does not get made”, she pointed out, referring to the Eurogroup declaration of last March (see EUROPE 13410/7). She added that: “You can expect the European Commission playing an active role in the debate and the steps that will come in the next mandate”.
CMU challenges. Ms Jour-Schroeder highlighted a number of issues inherent in the future of a genuine CMU. She spoke of the complexity of integrating cross-border investments and the need for strong political will within the EU to adopt truly European solutions, even if this requires adjustments to national financial systems.
The senior official also spoke of the importance of striking a balance between bank financing and capital markets, and questioned the need to create new European institutions or strengthen existing ones to improve governance.
Ms Jour-Schroeder addressed the potential impact on future generations, particularly in terms of pensions, and presented thoughts on how to make the European legal framework more effective and accessible, while preserving essential political objectives.
European start-ups and stock exchanges sound the alarm. In an open letter sent to European finance ministers and the European Commission on Tuesday 3 September, European start-up associations and stock exchanges called on policymakers to strengthen the European market for initial public offerings (IPOs).
“The situation is alarming: in 2021 alone, the US experienced more Tech IPOs than Europe did over the entire period from 2015 to 2023, and 50 European-founded companies have filed for an IPO in the US since 2018, including UK-based companies”, deplore the associations, including the European Startup Network.
They point out that this trend is leading to significant economic losses for Europe and call for the CMU to be strengthened in order to improve access to finance, encourage European investment and reduce cross-border transaction costs. They also call for the development of a financial culture to encourage investment in cutting-edge technologies in Europe.
To see the open letter: https://aeur.eu/f/daw (Original version in French by Bernard Denuit)