Local view for "http://purl.org/linkedpolitics/eu/plenary/2015-10-07-Speech-3-526-000"
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"en.20151007.27.3-526-000"2
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"Mr President, opening up capital markets clearly has some potential benefits. If an SME in the east of England, for instance, is able to make its case for funds to a middle-sized German investment fund, or even if a young couple can make their case to a potential mortgage provider from France, then in both cases the consumer may, in theory, get a better deal. And it is also the case that capital may, in general, end up being more efficiently allocated, improving economic outcomes. But there remain many pitfalls in the Commission’s approach.
Why, for instance the grandiose title of Capital Markets Union? There is clearly no realistic prospect of ending all geographic associations between the source of capital and where it is deployed. So to speak of a Capital Markets Union at all is to elevate federalist ideology above practical improvements.
In addition, the legal and credit risks run by companies are very different in different EU countries, and disclosing them fully is going to be costly and cumbersome. The head of the German Savings Banks Association has pointed out that corporate bonds are not really worth doing for less than EUR 10 million, while large investors are rarely interested in projects under EUR 25 million. Anecdotal evidence suggests that companies need to be turning over EUR 1 billion before the market become seriously interested, so it is hard to make a case that SMEs will benefit much from a Capital Markets Union. It is the corporates who stand to gain at the margins, and forgive me for not punching the air in wild celebration at that prospect!
Of course, any proposed financial transaction tax risks undermining even those incremental gains and certainly could harm Europe’s biggest and most successful capital market – the City of London. The dependency of the Commission’s plans on securitisation will also worry many citizens given that over-securitisation was a key factor in the great financial crash.
One does not need a political union for trade, and one does not need it to enable investment across borders. I hope the Commission will put aside grandiose schemes and instead be a more modest facilitator for agreements on investment flows between European nations."@en1
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