On 11 March 2024, the Eurogroup (in inclusive format, meaning that all EU finance ministers are included) published a statement on the future of the Capital Markets Union (CMU). The statement provides an overview of EU finance ministers’ common priorities for the future of the CMU. The introduction of the statement describes the current lack of non-bank funding, the growing lack of competitiveness of the EU capital markets, as well as the lack of a deep and well-functioning market for risk capital in Europe. Following the introduction, EU finance ministers set out a list of priority areas for the European Commission (Commission) to act on during its next term, which will start in 2024 and end in 2029. These areas are grouped under three main themes: architecture, business, and citizens. An overview of the main goals and actions are set out below.

1. Architecture. Member States aim to develop an agile capital markets framework allowing for a better cross-border diversification of risk, and developing a smart regulatory and supervisory system through the following measures:

  • Member States ask the Commission to assess all the factors that hold back the development of the EU’s securitisation market and review its framework.
  • Member States want the EU’s financial sector to be more effectively supervised through further developing the common rulebook and examining options to enhance supervisory convergence. Although the Member States call for a more effective use of the existing powers of the European Supervisory Authorities (ESAs), they do not ask for centralisation of supervision at EU level or more supervisory powers for the ESAs.
  • The Commission is asked to conduct a thorough assessment to identify areas in which regulatory burdens for the EU’s financial sector could be reduced, and to ensure that new legislative initiatives concerning financial services are always based on impact assessments in line with agreed principles for better regulation.
  • The statement calls for targeted convergence of national corporate insolvency frameworks.
  • Member States ask for further harmonisation of national accounting frameworks to enhance cross-border comparability of available information on companies. This would benefit the use of the European Single Access Point.
  • To increase the attractiveness of capital market funding for companies, Member States and the Commission are encouraged to assess how they could create better integrated market infrastructure in the EU and how they could further converge and harmonise listing requirements across EU exchanges.
  • To foster equity financing through well-designed national corporate tax systems to ensure EU companies have access to diversified sources of funding.

2. Business. The goal of Member States’ is to increase investments in the EU, and in particular in the sustainable and digital sectors, and to ensure that businesses, and in particular SMEs, have access to appropriate fundings and be competitive. This goal should be attained through the following measures:

  • To improve conditions for institutional, retail, and cross-border investment in equity, and in particular in growth/scale up venture capital. Member States call on the Commission to present proposals to improve the financing conditions for EU businesses, and, together with Member States, assess the barriers to cross-border investment, in particular within the EU equity market. One of the ideas mentioned in the statement is an EU initiative based on joint public-private investment structures facilitated by the EU Investment Fund aimed at improving exit routes from the venture capital stage.
  • The Commission is asked to continue its efforts to enhance the usability of the EU sustainable finance framework and support stakeholders with its implementation.

3. Citizens. Member States share a common goal of facilitating citizens’ access to capital markets by creating easier access routes to a larger choice of investment possibilities, and create tools to improve their financial literacy. This should be attained by the following measures:

  • By introducing easy-to-use and secure digital interfaces developed by the financial industry, and by making personal income tax systems more supportive of investments in capital markets, Member States hope to create an attractive, easy-to-use and consumer-centric investment environment. The Commission is asked to consider further changes to EU legislation to facilitate retail investments building on the legislative proposals that form the Retail Investment Strategy.
  • Member States aim to enhance the use of longer-term savings and investment products to support complementary income streams for an ageing population. Among other things, the Commission is invited by Member States to review the pan-European pension product framework.
  • To increase retail participation by facilitating the strengthening of an investor and shareholder culture among EU citizens, Member States want to improve financial literacy and introduce targeted initiatives to create more interest in long-term wealth-creation through investing.
  • The Commission and Member States are invited to examine the potential of developing a framework for a common cross-border market-based investment/savings product for citizens.

Next steps

As discussed above, the statement should be considered as a wish list of EU finance ministers for the coming legislative term. The Commission is asked to bring forward the related initiatives as early as possible during the next legislative term to ensure its completion by 2029. Member States will track the progress made on the statement at regular intervals.