Today, the European Commission presented the mid-term review of the Capital Markets Union (CMU) Action Plan put forward by Lord Hill in September 2015. Since then, the Commission has delivered 20 out of 33 announced measures. Based on the outcome of a public consultation, the Commission now is adapting the initial agenda to address recent challenges to financial integration, namely the future departure of the United Kingdom from the EU and the shift of private capital towards sustainable investment. The Commission’s financial services directorate has created a high-level expert group to help develop criteria for what is green or sustainable, and it is expected to publish an interim report in July.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The Capital Markets Union is a good idea which still awaits its realization. The action plan of the Commission plan contains welcome measures but falls short of what is needed to get to a real Capital Markets Union. The measures of the Commission do not match what real world investors miss. For retail customers cross-border investments are often unattractive. Many financial firms are unable to provide retail customers with the necessary tax information to fulfill tax obligations in their country of residence. Securities law is still fragmented as is company law and capital markets law. Legal certainty is often doubtful for cross-border investors being faced with foreign civil law proceedings including very long durations. The promise of Lord Hill to take forward a legislative initiative on insolvency law to remove barriers to the free flow of capital has not been fulfilled. The Commission proposal of November 2016 on preventive restructuring and second chance for entrepreneurs is insufficient. In order to achieve a real Capital Markets Union, hard work is necessary – harvesting low hanging fruits does not suffice. We have to tackle what real investors need.
However, we welcome that the Commission wants to follow-up to the recommendations of the High Level Expert Group on Sustainable Finance. We agree with Commissioner Katainen that we need a deep re-engineering of the financial system to shift capital to sustainable and green finance. Only if the rules are right, we create the necessary incentives for investments respecting ecological, social and „governance“ issues. Above all, it is always about both: strengthening the market for green financial investments and making the risks for non-sustainable investments visible, in order to promote the ongoing movement towards divestment. All this can only be successful if the environmental and social standards in the EU as a whole will become stricter. Only then, green investments will pay off. Naturally, green financial products will only thrive if profitable green investment opportunities boom.”
Links to the EU Commission CMU mid-term review
Questions and Answers:
Staff Working Document:
Initial CMU Action Plan of September 2015: