Criticism from the financial lobby
Study: European capital markets are lagging behind
The EU wants to promote the integration of its financial markets, but efforts are stalling. An association warns of consequences for competitiveness – there is also a need to catch up in Germany.
From the perspective of the financial market association AFME, the EU must push ahead with the integration of its capital markets in order not to lose ground to global competition. “The EU capital markets are falling behind,” writes the Association for Financial Markets in Europe (AFME) on its seventh report on the Capital Markets Union, which is to be presented this Tuesday in Brussels.
“Despite some economic gains, the EU lags behind the US, UK and China on most key indicators such as access to capital, global interconnectedness and market liquidity,” warns the lobby group, which represents major banks, brokers, law firms and investors. “The EU’s capital markets remain fragmented.” This undermines Europe’s economic competitiveness.
Billions in investments cannot be made without private capital
There is an annual funding gap of around 800 billion euros in the EU, which is needed for goals in key areas such as digitalization, infrastructure and sustainability. Without private money via the capital markets, this herculean task for public budgets does not seem to be possible. AFME boss Adam Farkas called for reforms: “Only an integrated and more efficient capital market can finance the initiatives that are so crucial to the competitiveness of the European economy.”
The Financial Market Association’s criticisms of Germany include, among other things, a low number of IPOs and a high savings rate among consumers, who, compared to other countries, invest comparatively little in the capital markets.
Efforts in Brussels have been stalling for years
Brussels has been working on the Capital Markets Union for years, with the aim of reducing bureaucratic hurdles between the EU states. The EU wants more small investors to invest in the local financial markets so that more capital is available for the green and digital transformation. Companies should have more opportunities to raise money. After years without much progress, the EU heads of state and government recently spoke out in favor of pushing the project forward more strongly.
AFME warns that northern European countries such as Luxembourg and the Netherlands have better access to finance, while eastern European countries lag behind. Although the EU is a leader in sustainable financing such as green bonds, the area has only been growing slowly recently. At the same time, private investments in financial start-ups are low compared to the USA and Great Britain.
dpa
Source: Stern
