Action Plan on building a Capital Markets Union

The European Commission published an Action Plan on building a Capital Markets Union

On 30 September 2015 the European Commission published its Action Plan on building a Capital Markets Union (CMU). The Action Plan describes the benefits of such CMU, the main axes on which its actions towards achieving the CMU will be focused, and the first steps for its completion. The Action Plan is the result of the public consultation on the measures needed to unlock investment in the EU and to create a single market for capital, which was launched in February 2015 by means of issuing a relevant Green Paper on the Building of the CMU, and closed on 13.05.2015. The Green Paper which the Commission issued in February described the meaning, the content of the CMU and its necessity alongside the Banking Union. It also sought views from interested parties on the early policy priorities which the Commission intended to proceed with. In this second phase of the building of the CMU, the Commission, after assessing all the input it received, reached a conclusion on which policies should be followed, and described exactly what needs to be done, in order for the target of a genuinely single market for capital to be accomplished. Apart from the early actions described herein, the Commission is expected to take further towards the CMU.

The establishment and proper functioning of the CMU is one of the main pillars of the Investment Plan and is expected to have a significantly positive impact on the European economy altogether. More specifically, the CMU will support investment in Europe by unlocking financing for the European undertakings by means of providing financing resources complementary to bank-funding. This would be particularly the case for SMEs and start- ups, which, although being the backbone of the European economy, are not able to access the traditional funding tools easily.

Apart from these undertakings, the CMU should provide both retail and institutional investors with additional and more diverse investment opportunities, more transparency and larger potential returns.Taking into account that all the measures described in the Action Plan have as common denominator the breaking down of any national regulatory or other barriers which block cross-border investment, should the CMU become reality, all market participants would be benefiting from a unified, more competitive single European capital market with great scale and depth. Moreover, the establishment of a genuine single market for capital would be a significant step towards the completion of the Economic and Monetary Union.

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