Will the Capital Markets Union Revive European Growth?

Abstract

Abstract The EU Capital Markets Union initiative is supposed to further integrate and strengthen European capital markets. However, the Commission’s current agenda fails to harmonize the national markets on one competitive framework. Instead, the Taxonomy Regulation adds a new layer of rules on top of the existing barriers. The proposal of a common safe asset – a frequent demand in the context of the Capital Markets Union – would weaken member states’ willingness to address structural problems through comprehensive market reforms. Consequently, the current agenda further harms the attractiveness of European capital markets instead of improving them. A genuine Capital Markets Union would require the EU to abandon its path of top-down harmonization and allow competition among national frameworks to determine the best rules.