Single capital market
Deutsche Börse is pushing for progress on the Capital Markets Union
The EU needs a lot of money to cope with major future tasks, but there is no common capital market. With the new EU Commission taking office, the co-head of Deutsche Börse is calling for reforms.
The co-head of Deutsche Börse, Stephan Leithner, calls for more efforts to bring together the capital markets in Europe. “Despite decades of efforts, our capital market is still underdeveloped by global standards and its size does not correspond to the size of the EU economy and its international role,” writes Leithner in a new paper from the Dax Group on the further development of the Capital Markets Union.
An important phase is now approaching, writes Leithner with a view to the upcoming inauguration of the new EU Commission. It’s about “transforming the capital markets union into a real savings and investment union”, in particular about putting citizens and investors more in focus and mobilizing private capital – for example for retirement provision through pension funds.
Even in view of the weak economic growth, the EU must create “nothing less than a new vision for the Capital Markets Union,” says Leithner. Only around ten percent of global IPOs take place in the EU. There is also a trend towards relocation of companies to other regions, he warned.
Efforts in Brussels have been stalling for years
In the paper, Deutsche Börse advocates, among other things, less fragmentation of stock markets in the EU, harmonized requirements for stock exchange listings, more uniform financial supervision and greater digitalization and data use in the economy. Citizens should also invest more. Across the EU, more than 33 trillion euros in savings are held in cash or bank deposits – “an unused resource”. The EU should establish new savings and investment products, supported by tax incentives.
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. This should make it easier for companies to get capital. After years without much progress, the EU heads of state and government have recently spoken out in favor of pushing the project forward more strongly.
Lagarde for European standards for savers
The Capital Markets Union is “the key to becoming more resilient in a fragmented global economy,” the President of the European Central Bank, Christine Lagarde, recently said in Frankfurt. Europe must offer savers products that are accessible, transparent and affordable. “In my opinion, a ‘European savings standard’ – a standardized, EU-wide package of savings products – is the best way to achieve these goals,” said Lagarde.
dpa
Source: Stern
