Why do we need a capital markets union?
The capital markets union (CMU) is a plan to create a single market for capital. The aim is to get money – investments and savings – flowing across the EU so that it can benefit consumers, investors and companies, regardless of where they are located.
A capital markets union will
- provide businesses with a greater choice of funding at lower costs and provide SMEs in particular with the financing they need
- support the economic recovery post-Covid-19 and create jobs
- offer new opportunities for savers and investors
- create a more inclusive and resilient economy
- help Europe deliver its new green deal and digital agenda
- reinforce the EU’s global competitiveness and autonomy
- make the financial system more resilient so it can better adapt to the UK’s departure from the EU
While progress has been made since the CMU initiative was launched in 2015, EU capital markets remain fragmented. The Commission therefore adopted on 24 September 2020 a new CMU action plan. The plan set out 16 legislative and non-legislative measures to deliver on three main objectives
- support a green, inclusive and resilient economic recovery
- make the EU an even safer place to save and invest long-term
- integrate national capital markets into a genuine single market
One year after the adoption of the 2020 CMU action plan, a strong and complete CMU is needed more than ever, in order to support the economic recovery following the COVID-19 crisis, finance the green and digital transitions and enhance the EU’s open strategic autonomy.
On 25 November 2021, the European Commission delivered on several key commitments in the 2020 CMU action plan by adopting a package of four legislative proposals. The CMU package also includes a communication that explains how the legislative proposals fit together, sets out some key deliverables for 2022 and provides an update on the implementation status of all other actions from the 2020 CMU action plan.
The steps towards a CMU taken so far
Efforts to put in place a true single market for capital started with the Treaty of Rome more than 60 years ago and intensified with the free movement of capital, a freedom enshrined in the 1992 Maastricht Treaty and the financial service action plan in 1999. But this objective has not yet been achieved.
The CMU initiative was launched by the Juncker Commission, which adopted the first CMU action plan in September 2015. It sets out a list of over 30 actions to establish the building blocks of an integrated capital market in the EU by 2019.
- 25 November 2021
The Commission adopted a CMU package of four legislative proposals delivering on some key commitments and a Communication.
- 9 June 2021
The Commission published a list of indicators to monitor progress towards the CMU objectives.
- 24 September 2020
The Commission adopted its new action plan on the CMU.
To feed into its work on future CMU policies, the Commission brought together 28 highly experienced industry executives and top international experts and scholars in the High Level Forum on CMU.
In June 2020 the Forum published its final report with 17 recommendations to the Commission on the way forward to completing CMU.
The Commission published a progress report showing that the Commission has tabled all the legislative proposals it committed to in the CMU action plan and mid-term review.
Working towards a capital markets union remains a top priority of the Von Der Leyen Commission and is part of Executive Vice President Valdis Dombrovskis’ mandate for an economy that works for people.
- June 2017
The Commission mid-term review updated and complemented the CMU action plan by strengthening existing actions and introducing new measures in response to evolving priorities and challenges.
- September 2016
The European Commission adopted a communication setting out the next steps to accelerate the completion of the CMU
- April 2016
The Commission took stock of the progress made in the first six months of implementation of the CMU action plan in its first status report.
- September 2015
The Commission adopted the first CMU action plan.
Measures already implemented
The Commission has largely delivered on the individual actions announced in the 2015 CMU action plan and the 2017 mid-term review. The European Parliament and Member States have so far agreed on 12 out of 13 legislative proposals put forward by the Commission. In addition, the Commission has completed a number of non-legislative measures to further the aims of CMU.
Studies under the CMU
Since the launch of the first capital markets union action plan in 2015, the Commission carried out a number of studies, prepared by external consultants, to inform its work in specific areas. This research helps the Commission shape policy actions and identify where legislation may be needed.