This week, the EU Commission made a first step towards creating a European Capital Markets Union. Vice President Katainen called the Capital Markets Union an important element of the EU strategy for more investments. The aim is to create a genuine single market for capital in Europe, which above all shall also secure funding of small and medium-sized enterprises. The launch date for the Capital Markets Union has been scheduled for 18 February; the Commission expects its implementation in 2019.

Harmonised European framework conditions shall make it easier in future for companies within the EU to sell shares, bonds and other investment instruments to investors. It is the aim to ensure that in particular small and medium-sized enterprises (SMEs) will get better access to financial capital and that their dependence on bank loans will be reduced. At the same time, barriers with regard to cross-border investments shall be removed. Based on this development, the Commission expects a significant increase in investments, regarding the Capital Markets Union as a key element in respect of promoting employment and growth. However, so far Katainen has been unable to address concrete issues such as the question as to how securitizations, which fell into disrepute because of the financial crisis, are to be reformed.

The role of the Capital Markets Union is to contribute to the objective of the European Union wanting to be perceived as an investment market to an even stronger degree. The consolidation of the various systems shall help to reduce costs of securities trading. However, the question whether a European Capital Markets Union also requires a harmonised supervisory authority remains open. In particular Great Britain is voicing clear resistance against pan-European supervision.

In a next step, the EU Commission will present a so-called “Green Paper” on 18 February, which will form the basis for a consultation with the interested public. The competent Commissioners Jyrki Katainen and Jonathan Hill expect that die Capital Markets Union will come into force in 2019.