EU trio tries to quicken drive to more integrated capital markets

Brexit gives bloc ‘urgent strategic’ problem, say France, Germany and Netherlands

France, Germany and the Netherlands have issued a joint call for more integrated capital markets in Europe, warning that Brexit had left the bloc facing “an urgent strategic issue”.

The three countries’ finance ministers signed a plan in Brussels on Thursday calling for a new wave of measures to build a “capital markets union”, a project that has been an EU priority since 2015 but remains incomplete.

The countries want an EU experts group to draw up plans by the end of September on how to break down barriers to cross-border investment and so boost financing options for businesses.

“It is critical for the union to bolster its capacity to finance its growth and job creation, as a necessary condition to ensure the resilience of its economy,” the ministers said in a joint statement circulated to other capitals.

They warned that the decision of Britain to leave the EU, taking with it the bloc’s main financial centre and capital market, increased the importance of the capital markets union and that making a success of the project as the EU27 would improve “the international competitiveness of the European economy as a whole”.

The call marks a rare moment of detente between France and the Netherlands on EU economic policy. The Hague has emerged as the main opponent to integrationist plans advanced by President Emmanuel Macron of France for boosting the resilience and competitiveness of the euro area, notably his push to create a eurozone budget.

Bruno Le Maire, the French economy minister, and Wopke Hoekstra, the Dutch finance minister, have clashed on these and other issues, including the Dutch government’s surprise decision this year to increase its shareholding in Air France-KLM.

The plans are also a sign of how the project for the capital markets union has morphed since the Brexit referendum from a plan aimed at making it easier for investors based in the City to operate across borders to one aimed at building alternative capital markets to London.

Steps already agreed on by the EU to build the capital markets union include simplifying the prospectuses that companies issue when seeking equity investment, granting businesses more protection from creditors, and creating a pan-European personal pension product.

“Compromises have been reached on important legislative proposals,” the three countries say in their statement. “The need to further integrate the capital markets union is, however, still very much present.”




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