European Capital Markets Union Promises Sustainability

The planned Capital Markets Union will offer new financing methods to small and medium enterprises (SMEs. For small businesses in Europe, the issue of securing capital is becoming increasingly important. In the future, companies in Hesse are also expected to benefit from the European project and had the opportunity to inform themselves about these opportunities today at the Chamber of Tradecrafts in Frankfurt. The European Commissioner for Financial Stability, Financial Services and Capital Markets Union, Lord Jonathan Hill, and the Hessian Minister of Finance, Dr. Thomas Schäfer, discussed the benefits of the proposed capital market Union with about 30 representatives of Hesse’s SMEs and representatives of the banking and finance sector. The companies were also able to express their wishes for future development of the Capital Markets Union.

The workshop organised by the Hessian Ministry of Finance and Frankfurt Main Finance illustrates the close cooperation with SMEs and should promote further discourse.

Dr. Lutz Raettig, Chairman of the Executive Committee of Frankfurt Main Finance, underlined the role of SMEs in this process: “The voice of the business community is essential for the success of the Capital Markets Union in Hesse and throughout Europe. The companies’ access to alternative financing holds great potential for Europe,” said Raettig.

The Hessian Minister of Finance, Dr. Thomas Schäfer, pointed to the development opportunities for SMEs brought with the Capital Markets Union: “When properly implemented, the creation of a Capital Markets Union allows us to improve the financing opportunities for our companies spurring increased long-term economic and job growth. At this point, the Chambers of Tradecrafts can make a valuable contribution with their experience and expertise. In addition to expanding the range of financing options – which should not to replace but act alongside financing from banks – regulatory complexity and unnecessary regulatory requirements must to be reduced as soon as possible. In order for an effective implementation to be successful, it is vital for the politicians to understand the specific problems and needs of business owners. After all, they are the ones for whom the project is intended to serve.”

Hesse’s Minister of Finance made it clear: “The Capital Markets Union is good for the future of the Hessian SMEs. The State of Hesse is already strongly committed to the small and medium enterprises in the region. For example, the Innovationsförderung is responsible for the promotion of innovation in Hesse through support of technology-oriented research and development projects of SMEs and universities in cooperation with other partners from industry and research.”

Commissioner Hill said: “German SMEs are the backbone of the economy and are a major engine of growth. One of the goals of the Capital Markets Union is to open up businesses in Europe a greater choice of financing sources. This should help them to invest and grow. I want European start-ups and companies to find the funding they need in Europe.”

The long term goal of the EU initiative is to create a single capital market. This should result in rising levels of investment and thus growth and employment in the EU. The Capital Markets Union is a project which is being pursued in Europe with great commitment. The discussion is based on the European Commission’s Action Plan on Capital Market Union published September 30th. The plan envisions an EU-market for simple, transparent and standardised receivables securitisation. The plan also calls for a Europe-wide legal framework for covered bonds, investment by insurance companies and asset managers, venture capital and crowdfunding. The foundations for establishing the Capital Markets Union should be laid by 2019.