On Monday 17 March, Aurore Lalucq (S&D, French) unveiled a draft report on European competitiveness and the creation of a Capital Markets Union (CMU). She advocates an ambitious approach to integrating the EU’s financial markets, with an emphasis on public investment, as the European Commission prepares to present its Savings and Investment Union (SIU) initiative on Wednesday 19 March, focusing more on removing regulatory barriers and providing incentives to attract private capital.
Ms Lalucq’s recommendations include the creation of a European secure asset, the use of the European Stability Mechanism (ESM), the introduction of a single supervisory body, the European Securities and Markets Authority (ESMA), and the creation of a European Economic Intelligence Unit.
Building on the ‘Draghi’ and ‘Letta’ reports, the document drafted by the French Socialist advocates a “general mobilisation of all available financial resources and instruments” to strengthen the European Union’s security, industrial and technological sovereignty, without abandoning the EU’s environmental and social objectives.
Common European Assets. “We need to mobilise public and private funding across Europe. Because when it comes to defence, I don’t know if we can count on private funding”, Aurore Lalucq told Agence Europe. In her view, the current geopolitical crisis could represent a decisive political opportunity to issue a common European asset, enabling large-scale financing of joint projects.
Such an instrument would strengthen the EU’s financial integration, but its creation requires a solid political consensus on the mutualisation of public debt and European fiscal governance. To achieve this, Ms Lalucq advocates mobilising the ESM, the euro area’s permanent rescue fund, which could rapidly become a strategic investment tool for European defence.
Economic intelligence. Over and above purely financial instruments, the Chair of the European Parliament’s Committee on Economic and Monetary Affairs is calling for a Europe that is economically strategic, capable of protecting its data against cyber-attacks, making the most of its skills and embodying stability. The draft report calls for the creation of an Economic Intelligence Unit.
Direct supervision. While the European Commission is expected to come out in favour of strengthening the tools for convergence of national supervisors and the role of European supervisory authorities in the third quarter of 2026 (see EUROPE 13600/13), Ms Lalucq proposes going further by granting ESMA direct supervisory powers over certain pan-European market infrastructures.
“A single supervisory framework, harmonisation of the law, a common framework for bankruptcy law and sound financial education: without these essential steps, the construction of the CMU will remain out of reach”, she warned.
Clearing. The European Parliament’s draft text urges the European Commission to propose measures to strengthen the clearing of financial transactions in the EU. A large proportion of European transactions are still cleared in the United Kingdom (see EUROPE 13570/17).
Securitisation. While the Commission is considering relaunching securitisation as a means of leveraging financing, Ms Lalucq did not include this option in her draft report, believing that the measure would make investors even more dependent on banks.
According to a draft communication of which Agence Europe received a copy, the Commission will present proposals to relaunch securitisation in the second quarter of 2025, focusing on the revision of due diligence requirements, transparency and prudential rules for banks and insurers.
“Securitisation can boost investment by allowing banks to increase lending to households, SMEs, and larger corporates by transferring risks to those that are able to bear them and thereby freeing up their capital”, the Commission argues in its draft communication.
To see Mrs Lalucq’s draft report: https://aeur.eu/f/fza
To see the European Commission’s draft communication: https://aeur.eu/f/fzb
The Netherlands issues its recommendations. In anticipation of the presentation of the Commission’s communication, the Dutch Ministry of Finance has submitted a contribution on the integration of European capital markets. It identifies three main areas of work: - stronger supervision at EU level; - more and diverse capital supply; - more uniform rules.
In Europe, “there is sufficient capital available, but it needs to be invested. For this to happen, it is essential that the CMU works well”, said the Dutch Finance Minister, Eelco Heinen.
With regard to supervision, the ministry recommends transforming the directives governing the financial markets into regulations, in order to promote more uniform application of the rules. The major financial players with cross-border activities (central clearing houses, asset managers) should be supervised at EU level, he believes, not ruling out strengthening ESMA’s powers through innovative supervisory models. And financial data should also be collected and stored by a European financial supervisory authority.
In order to increase the supply of capital, the Netherlands is putting forward the idea of an EU investment account under which Member States can apply national tax incentives to encourage people to invest more in the EU, in particular in companies in sectors that are strategic for EU competitiveness. They recommend promoting supplementary pension schemes, stimulating the growth of venture capital funds, reviewing the framework for securitisation by relaxing the rules for a greater number of institutional investors, and facilitating long-term investments for insurance companies.
For the Dutch ministry, the main existing barriers to the movement of capital must be removed “quickly”. Suggestions include standardisation of collateral law, and the development of a 28th regime for a specific category of players, such as innovative SMEs.
To see the letter from the Dutch Ministry: https://aeur.eu/f/fzg ; and its detailed proposals: https://aeur.eu/f/fzh (Original version in French by Bernard Denuit with Mathieu Bion)