The European Commission has launched the Capital Markets Union (CMU) Action Plan for a true single market to help build capital within the 28 EU Member States. One of the urgent actions published in the plan includes the re-introduction of sound security markets.
The action plan was designed to remove obstacles for cross-border investments in the EU and access to finance. The current climate is difficult for companies that have bank financing and low dependency on capital markets. If the deep venture capital markets of the US were available to the EU between 2009 and 2014, there would have been an excess of EUR 90 billion funding for EU companies.
Alternative sources of funding widely available in other parts of the world were listed for companies struggling to find resources, especially SMEs and start-ups. These include capital markets, venture capital, crowd-funding and asset management industry. It is integral to have diverse sources of funding for investment and developing businesses to maintain financial stability.
In the event of security problems in the banking sector, the benefits to businesses and access to finance may be mitigated. For this reason the CMU represents an important step towards the completion of the European Economic and Monetary Union.
