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EU Policy. Brussels bemoans its capital market 'Cinderella'

The European Commission's Mairead McGuinness
The European Commission's Mairead McGuinness Copyright Johanna Geron/AP
Copyright Johanna Geron/AP
By Jack Schickler
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The EU wants to expand funding sources for small business – but even as new listing rules are finalised, its architects admit all’s not going to plan.


The EU has long had a goal to unify its capital markets – but even the officials directly involved now appear to be admitting defeat.

Despite an attempt to ease financing conditions and stop small businesses skipping across the Atlantic, the reality isn’t matching the rhetoric, Euronews was told by the EU’s most senior financial services official.

“When I speak to leaders and ministers, they are in favour of banking union and capital markets union, but they are not in favour of a single market for capital in a way that is necessary so that we can have companies that can get funding,” Mairead McGuinness, the EU’s financial services commissioner, said in an interview today (1 February).

“We need a mindset change” to ensure there’s access to financing options beyond mere bank loans, she added.

The European Commission first committed in 2015 to build a single market in capital, reiterating the goal in 2020 after President Ursula von der Leyen took office.

The cause has been taken up by the European Central Bank’s Christine Lagarde, who called for a “Kantian shift” to offer over €600bn in funding for the energy and digital transitions.

But proposals favoured by Lagarde, including an EU supervisor on the lines of the US Securities and Exchange Commission, have largely been rejected by the EU member states which must agree new laws.

In a speech given earlier to the Financing Europe conference in Brussels, McGuinness noted some successes in easing stock-market listings and centralising data.

But she acknowledged that companies that can’t get venture capital at home still often flee – citing German shoemaker Birkenstock, which was last year compelled to list on the New York Stock Exchange.

Even the architects of new EU rules vaunted by McGuinness are downbeat about the impact.

Alfred Sant, the Maltese socialist MEP who shepherded a recent Listing Act through the European Parliament, said the legislation he’s currently finalising was “just a crumb”.

“I’m personally sceptical whether this is going to provide a lunch,” he said, after member states largely rebuffed lawmaker plans to ease public offerings on a wider range of regulated markets.

“Capital markets union is like the Cinderella of Europe,” he said, adding that the slow, piecemeal approach was harming small business. “To be honest I don’t think there’s the political will”. 

Within hours of Sant's comments, the Council announced a deal finalising the rules he's responsible for.

The new rules will widen financial options for small busineses and make EU capital markets "more attractive and competitive," said a statement by Belgian Deputy Prime Minister Paul Van Tigchelt.

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