EU Observer brings the new that EU wants to fast-track the capital markets union. The reason is Brexit that places the main capital market of the EU (London) outside its borders.
The UK's exit from the EU makes a union of the 27 national capital markets more urgent, the European Commission said on Thursday (8 June).
"As we face the departure of the largest EU financial centre, we are committed to step-ping up our efforts to further strengthen and integrate the EU capital markets", said commission vice-president Valdis Dombrovskis, who is in charge of financial services.
Dombrovskis presented a mid-term review of the Capital Markets Union (CMU), a plan launched in 2015 to increase links between EU markets and develop financial tools in order to facilitate investments and boost the economy.
Most of the proposals presented so far deal with specific financial products, such as venture capital or insurances.
"The EU needs CMU today more than ever," said the review unveiled on Thursday. It insists that Brexit "reinforces the urgent need to further strengthen and integrate the EU capital market framework”.
With 751,000 financial sector employees and the industry's gross added value of £80.935 billion (around €93 billion), the City of London has been one of the main actors and beneficiaries of the CMU so far.
The City has been necessary to provide services for the rest of the EU, such as ensuring risk-management services and providing the necessary amount of liquid cash for transactions, notes the commission's review.
I would think that the Brexit is an argument for the opposite policy. Venture capital or insurance have been around for centuries. We don't need integration for that. What Brexit shows is that centralization of such an important sector of the economy puts us all at risk. We need a spread of risk, not putting all our bets on one pony.