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16 December 2020

Online Panel Discussion on “Nitty-gritty or a grand design – what is needed to deepen the Capital Markets Union”

Deepening the capital markets union is one of the most important projects required to create a real single market for financial services. To discuss further steps, the German Council Presidency invited representatives of European institutions as well as Germany’s two partners in the presidency trio, Portugal and Slovenia, to a virtual panel discussion that took place on 16 December 2020.

Jörg Kukies – Former State Secretary at the German Finance Ministry – stressed that the Covid-19 pandemic further increases the significance of the capital markets union as the union can make a substantial contribution to speeding up post-crisis economic recovery. He explained that this is why the German Council Presidency had made deepening the capital markets union a priority, and why it had worked towards the adoption of the Council conclusions on the Commission’s Capital Markets Union (CMU) action plan as well as towards agreement with the European Parliament on the Capital Markets Recovery Package. The State Secretary also emphasised the importance of investors’ trust in the capital and financial markets. To reinforce this trust and ad-dress the weaknesses that have recently come to light, the German government has adopted a law to strengthen financial market integrity.

Isabel Benjumea – MEP and rapporteur on the capital markets union – urged an ambitious implementation of the European Commission’s CMU action plan, arguing that this would strengthen the single market as well as the European Union’s competitiveness. She explained that, in light of Brexit, the European capital markets needed to be strengthened if they are to compete with the United Kingdom. In this, a strong European supervisory system would play a key role. The European Commission’s CMU action plan was an important step in the right direction, but one that required specific goals and timetables.

John Berrigan – the responsible Director-General at the European Commission – cautioned that the necessary ambition would also need to be tempered with a dose of realism. Despite there being a fundamental consensus on the need to take action, considerable differences of opinion persisted concerning the precise structure of individual aspects. Berrigan stressed that, while it was important to set priorities, work on all measures needed to begin immediately.

Verena Ross – Executive Director of the European Securities and Markets Authority (ESMA) – underlined the importance of supervisory convergence, arguing that, for a joint capital market, not only a single rulebook but also harmonised application were key. Only this would ensure sufficient protection for investors.

Miguel Montenegro Silva – Coordinator for financial services at the Portuguese Finance Ministry – praised the Council conclusions and highlighted that a deeper capital markets union would contribute to the financing of the green and digital transformation, and vice versa.

Urska Cvelbar – Director-General at the Slovenian Finance Ministry – emphasised that deepening the capital markets union was more important than ever in times of crisis, in particular to stimulate economic recovery. The Director-General stated that the Slovenian Presidency would advance the banking union as a complementary project in parallel to the capital markets union, stating that both were core elements for supporting business, notably small and medium-sized enterprises.