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Long-term financing

Europe’s pressing challenge is to put the EU back on the path of smart, sustainable and inclusive growth, creating jobs and enhancing competitiveness in the global market place. In responding to this task, Europe faces large-scale, long-term investment needs.

To fund these long-term investments, governments and businesses of all sizes need access to long-term financing. The capacity of the economy to make such long-term financing available depends on the ability of the financial system to channel the savings of governments, corporates and households effectively and efficiently to the right users and uses. Getting the long-term financing process right is central to supporting structural economic reform and returning to the long-run trend of economic growth.

The financial crisis has affected the ability of the financial sector in Europe to channel savings to long-term investment needs. An important question is whether Europe’s historically heavy dependence on bank intermediation in financing long-term investment will give way to a more diversified system with significantly higher shares of direct capital market financing and greater involvement of institutional investors and alternative financing.

Ensuring effective and efficient intermediation channels for long-term financing is a complex and multi-dimensional task. The Commission adopted a Green Paper on the long-term financing of the European economy on 25 March 2013 that opened a three month public consultation. Its purpose was to initiate a broad debate about how to foster the supply of long-term financing and how to improve and diversify the system of financial intermediation for long-term investment in Europe. Responses to the consultation contributed to further assessment by the Commission of the barriers to long-term financing, with a view to identifying possible policy actions and feeding the overall debate on this at European and international level.

One year later the Commission published the follow-up to this work: a Communication on long term financing of the European economy proposing a set of actions focusing on (i) mobilising private sources of long-term financing, (ii) making better use of public funding, (iii) developing European capital markets, (iv) improving SMEs’ access to financing, (v) attracting private finance to infrastructure delivering Europe 2020, and (vi) enhancing the wider framework for sustainable finance.

High level Conference on "Finance for Growth – Towards a Capital Markets Union" – Brussels – 6.11.2014

The European Commission (DG Financial Stability, Financial Services and Capital Markets Union) and the Italian presidency of the EU Council chaired a conference on "Finance for Growth" at witch high level representatives of institutions, top financial corporations, policy makers and key stakeholders in this field exchanged views on perspectives for long-term finance in the UE.


Communication on long term financing of the European economy – 27.03.2014

Green Paper on the long-term financing of the European economy – 25.03.2013

This Green Paper is accompanied by a Commission Staff Working Paper, setting out the underpinning analysis in more detail.