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Capital Markets Union must boost investment

Progressive Finance Ministers agree priority is investment and consumer protection

The Finance Ministers of the Party of European Socialists (PES) met today in Luxembourg ahead of the ECOFIN Council and adopted a paper outlining their common position on the development of the Capital Markets Union (CMU). The CMU is an initiative aimed at creating deeper and more integrated market of banks and other capital raising instruments across the EU, in order to boost investment in the economy and especially to Small and Medium Enterprises. This PES paper comes after the European Commission’s communication on the Action Plan on ‘Building a Capital Markets Union’ of Wednesday 30 September.

In their common paper, the PES Ministers highlight the role that the financial sector has to play to increase investment in Europe. The ministers define a set of key actions that should be undertaken, and highlight the fact that this process should follow a well-defined set of progressive principles:

-       protect citizens’ deposit:

-       effective taxation of the financial industry, through the FTT and other measures

-       transparency and strong financial regulation

-       focus on growth in the real economy and in particular SMEs

-       strong consumer protection

-       fostering a socially responsible financial sector

Rimantas Sadzius, Lithuanian Finance Minister and Chair of the PES ECOFIN Ministers network said: ‘If the Capital Markets Union is done correctly it can be an important tool to increase investment in the real economy, foster economic growth and create new jobs. To do this the CMU must respect some key principles: transparency and effective regulation in the financial sector; strong consumer and investor protection rules; and maximizing investment opportunities - especially for SMEs.’’    

Carsten Schneider, Vice-Chairman of the SPD Parliamentary Group responsible for budget, finance and Euro policy, Germany added: “The Capital Markets Union is only one building block to complete the Banking Union. Aside from better financial conditions for SMEs we must focus on protecting the tax payer with financial regulation. Therefore we must strengthen our efforts to tackle the problem of too-big-to-fail and shadow banking. I also ask for further steps to finally introduce a broad-based financial transaction tax.”

Peter Kazimir, Slovak Finance Minister stated: The Capital Markets Union has the potential to bolster economic growth and job creation in Europe, we need to embrace this opportunity. Promotion of real investment into our economies, effective cross-border capital traffic via simple and transparent products are quick wins we have to strive for.”

Eugen Orlando Teodorovici, Romanian Minister for Finance said "We need to create the right framework for growth in an ambitious, but also a sustainable and realistic manner, using a wide range of instruments adapted to the current context, with a forward looking perspective and offering opportunities for as many market participants as possible."

Maria Joao Rodrigues, Vice President of the S&D Group in the European Parliament added: The work on Capital Markets Union should be seen as a chance to harmonize legislative practices, to offer alternative financing sources to European businesses and to make sure that the financial sector serves the real economy. The CMU must translate into equal access to finance for consumers and firms throughout Europe, boosting investment and growth. The current fragmentation is an obstacle to cross-border investment and the CMU is an opportunity to fix this, while ensuring robust supervision.’ 

The Ministers also had the chance to discuss the development of the Banking Union.

Rimantas Sadzius commented: ‘The need to coherently develop an efficient Banking Union and a robust Capital Markets Union is apparent with the creation of a robust European Deposit Scheme being one of indispensable elements. Our aim is to move step by step towards a framework that both gradually reduces internal and external risks of the financial system and supports risk sharing among our countries. Therefore, we need fast but responsible actions in this direction.’    

Michel Sapin, Minister of Finance, France.

Carsten Schneider, Vice-Chairman of the SPD Parliamentary Group responsible for budget, finance and Euro policy, Germany.

Pier Carlo Padoan, Minister of Economy and Finance, Italy.

Rimantas Sadzius, Minister of Finance, Lithuania.

Edward Scicluna, Minister of Finance, Malta.

Peter Kazimir, Minister of Finance, Slovakia.

Magdalena Andersson, Minister of Finance, Sweden.

For more information on the PES Ministers Declaration on ‘A progressive Capital Markets Union – Supporting Europe’s real economy and SMEs’ click here.

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