How close are we to a Capital Markets Union?

The European Commission’s flagship initiative of the Capital Markets Union (CMU) aims to unlock funding for capital markets and find ways of linking investors and savers with growth. A number of very disparate measures will, it is hoped, have a cumulative but significant impact on the creation of a single market for capital. By the end of 2017, the Commission expects to have finalised and implemented the first phase of CMU measures, which include: an EU framework for simple, transparent and standardised securitisation; prospectus rules that facilitate access to capital markets and generate more, but less costly, financing opportunities; and improvements to the current venture capital and social entrepreneurship regulations. This year will therefore be crucial for the successful implementation of the CMU Action Plan and the delivery of its full potential to support growth in Europe. Nevertheless, notes the author of this ECMI Commentary, the impact of Brexit and the French and German national elections on CMU remains to be seen. The current climate of political instability and uncertainty places the EU at a crossroads, and it appears that the goal of completing the Capital Markets Union by 2019 is an increasingly remote one. This Commentary is a contribution to the public consultation on the Capital Markets Union mid-term review, 2017.