Lagarde: Remove obstacles to Markets Union

E.uropa’s top monetary guardian, Christine Lagarde, urges progress in the standardization of financial and capital markets on the continent. “If we want new, innovative companies to emerge after the pandemic, governments have to remove obstacles for them,” warned the President of the European Central Bank (ECB) on Friday at a banking congress broadcast on the Internet. In the world after the pandemic, the conclusion of the Markets Union is not an option, but a must.

The core of the Markets Union is to remove bureaucratic hurdles between the individual states of the European Union in order to give companies more opportunities to raise money. Consumers should also have more options for cross-border investments.

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The EU Commission’s plans for a capital markets union have been on the table since September 2015, but implementation has stalled. In September of this year, Brussels presented a new action plan to promote the unification of financial and capital markets. Among other things, the EU Commission wants to simplify investments and the taxation of investment income in other EU countries. The bankruptcy law is to be aligned.

The fragmentation of financial markets in Europe is one reason why start-up financing is often difficult for young companies, said Lagarde. “Funding high-risk technologies (…) is much more effective when there is a greater flow of new projects to compensate for the fact that most of them will fail.”


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