Labour MEPs welcomed the European Commission's Capital Markets Union (CMU) action plan today, but said it will be judged on its ability to make the European economy less dependent of bank financing and improve sustainable lending, particularly towards SMEs.
The CMU action plan aims to create more opportunities for investors; connect financing to the real economy; foster a stronger and more resilient financial system; and deepen financial integration and increase competition.
The main themes of CMU include: financing for innovation, start-ups and non-listed companies; making it easier for companies to enter and raise capital via capital markets; investment for the long term, infrastructure and sustainable investment; and using capital markets to enhance banks' capacity to lend.
Neena Gill MEP, member of the European Parliament economic and monetary affairs committee, said:
"We welcome the CMU package and its action plan as an ambitious step to make the European economy less dependent of bank financing, but we will assess the package on its capacity to improve sustainable lending, in particular towards SMEs.
"The package must also aid start-ups, with a focus on the crowdfunding sector, more widely used in other parts of the world, which should play a bigger role in providing financing to companies that struggle to get funding.
"The CMU proposals will increase access to finance for businesses by strengthening cross-border capital flows. No longer will businesses be forced to look beyond the EU and to the US for funding.
"This is an ambitious package that will help to drive growth and jobs, but restoring confidence is key for it to succeed. Securitisation could be a useful instrument to channel more funds to the real economy but more transparency, harmonisation and standardisation are key, as well as incentives to minimise and rightly allocate risks.
"Provided these elements are sufficiently present, the CMU package can make a real difference for the European economy."
Neena Gill MEP added:
"CMU can only become a success provided we regulate from an international perspective: capital flows worldwide, and the EU is not an island. Therefore international regulatory cooperation is necessary.
"The UK can’t stand on the sidelines and watch while others set the rules on legislation like this. The CMU is the latest example of why remaining part of the EU is vital for our economy, enabling us to benefit from membership of the single market."