Reporting by Maria Martinez, Editing by Rachel More and Sharon Singleton
Finance
EU capital markets union needed to improve efficiency – German finance minister
European flags fly outside the European Commission headquarters in Brussels, Belgium March 13, 2023. REUTERS/Yves Herman/File Photo Acquire Licensing Rights
BERLIN, Sept 13 (Reuters) – The European Union needs to take further steps towards a single capital market to improve access to finance to fund growth areas, such as new technologies, the French and German finance ministers said on Wednesday.
“The American capital market is incomparably more efficient than the European one, because we basically have 27 individual capital markets,” German Finance Minister Christian Lindner said in a joint press conference with French Finance Minister Bruno Le Maire and German Economy Minister Robert Habeck.
The ministers were speaking after Le Maire joined the German cabinet as a guest at its weekly meeting.
“The absence of a capital markets union is a structural handicap for the success of the European economy,” Le Maire said.
The ministers presented a joint roadmap of what needs to be done to unleash the potential of private capital markets for the EU, with a focus on improving market access for small and medium-sized enterprises.
Lindner said what distinguishes the European Union from the U.S. is not the quantity of public funds, but the efficiency of private capital markets.
There is no shortage of public funds in the EU, he said, noting that there were more public funds available in the 800-billion-euro ($860 billion) Next Generation EU programme than in the U.S. Inflation Reduction Act, with its $369 billion in subsidies.
However, there are differences in private funds.
“For the financing of future tasks, of technologies and transformations, it is therefore important to mobilise the private capital that we have in Europe,” Lindner said.
These include promoting sustainable finance so that the capital markets also pursue sustainability goals, optimising exit opportunities via IPOs and becoming a more attractive stock exchange location.
“Together with France, we want to continuously review rules of action and obstacles,” Lindner said. “We want to work towards making regulation and supervision in the financial markets sector more agile, more adaptable and less costly.”
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