The capital markets union is an EU initiative which aims to deepen and further integrate the capital markets of the 28 EU member states.

The capital markets union aims to:

  • provide new sources of funding for businesses, especially for small and medium-sized enterprises
  • reduce the cost of raising capital
  • increase options for savers across the EU
  • facilitate cross-border investing and attract more foreign investment into the EU
  • support long-term projects
  • make the EU financial system more stable, resilient and competitive

To achieve these goals, the European Commission has proposed an action plan containing a number of steps for a gradual building of the capital markets union to be completed by 2019. Most of the actions are focused on shifting financial intermediation towards capital markets and breaking down barriers that are blocking cross-border investments.

The action plan includes a range of tools, from EU legal acts to support for initiatives led by the industry. The project supports and complements the Investment plan for Europe initiative, which is designed to boost investment in the EU.

Short-term measures under the action plan:

  • a package of two legislative proposals on securitisation
  • a review of existing rules on prospectuses
  • new rules on Solvency II to be applied to infrastructure projects
  • consultation on covered bonds
  • consultation on venture capital and social entrepreneurship funds
  • call for evidence on the cumulative impact of current financial rules

In the Council

16 November 2016: the Council agreed its negotiating position on amendments to the EU rules on investment in venture capital and societal enterprises. The amendments, introduced to the EU regulations 345/2013 and 346/2016, make European venture capital funds (EuVECA) and European social entrepreneurship funds (EuSEF) available to fund managers that manage assets of more than €500 million. Updated rules also expand the range of companies that EuVECA and EuSEF funds can invest in, including small and medium-sized enterprises. They also make cross-border marketing of such funds cheaper and easier. 

The Council will begin negotiations with the European Parliament on the final text of the amendments once the latter has adopted its negotiating stance.

10 November 2015: the Economic and Financial Affairs Council welcomed the first package of legislative proposals and initiatives from the European Commission, published on 30 September 2015, and emphasised the need for an ambitious agenda for the longer term. 

16 June 2015: the Council adopted conclusions on the capital markets union and asked the European Commission to propose an action plan and an initial roadmap.

Next steps

The Commission will report regularly to the European Parliament and the Council on progress made in implementing the proposed actions. In addition to annual reports, the Commission will prepare a comprehensive report in 2017, which will serve as the basis for deciding on any additional measures that may be required.