Today, the European Commission has presented its new legislative package to promote further integration of capital markets and to centralise supervision in the EU. The Socialists and Democrats welcome it as an important, necessary step to reap the full benefits of the single market and ensure the urgently needed massive investments in Europe.
Over a year ago, Mario Draghi, former Italian prime minister and president of the European Central Bank, warned in his report on competitiveness that Europe needs €800 billion in annual investments, an amount that cannot be met through bank financing alone. He also emphasised the need to improve European competitiveness through measures such as supervisory simplification.
The S&D Group has long called for further integration and completion of the EU’s Capital Markets Union, including giving European supervisory authorities direct oversight of large cross-border financial firms.
This is crucial, as the persistent national fragmentation in Europe’s capital markets severely limits the benefits that can be gained from the EU’s single market. According to the International Monetary Fund, internal barriers in financial services alone act as the equivalent to a tariff of over 100 percent.
Jonás Fernández, S&D spokesperson on economic and monetary affairs, said:
“When we talk about productivity or so-called ‘competitiveness’, the EU should have no higher priority than completing the single market and creating strong, integrated capital markets to help generate the massive investments Europe so urgently needs.
“In this context, we welcome the steps announced by the Commission today to further strengthen and centralise supervision at the European level by giving the European Securities and Markets Authority (ESMA) direct oversight of large cross-border entities, such as clearing houses and other pan-European market infrastructures. Centralising these powers in ESMA will ensure more effective and coherent supervision and help deliver better-regulated capital markets in the EU.
“However, we regret that the Commission did not extend central oversight by ESMA to other actors such as large cross-border asset managers. Similarly, we consider it a missed opportunity that comparable powers were not given to the European Insurance and Occupational Pensions Authority to supervise cross-border firms, such as providers of pan-European pension products.”
