In the forty-second episode of the EU to go podcast, Johannes Lindner and Sebastian Mack talk to Thu Nguyen about the potential of a European capital markets union. They explain where the idea of standardising national capital markets comes from, why it is so difficult to implement and how it could help financing the European Union's major future projects.
It's going to be expensive: the path to a green, digitalised and sovereign European Union will require investments that far exceed the public budget of the community of states. This requires a lot of private money as well as public funding. While in the US the demand for private investments is largely covered by the capital market, the EU relies on loans from its banks. A regulated, standardised capital market has the potential to promote advanced technologies and industries that are too risky for banks to finance. The idea is not new, but there are many obstacles in the way of its implementation.
Senior Policy Fellow Sebastian Mack and Co-Director Johannes Lindner from the Jacques Delors Centre join Thu Nguyen to look at the topic and explain the tailwind that the idea of a capital markets union has received, not least thanks to Enrico Letta's report on the EU single market. They discuss the opportunities and risks of a deeper integration of national capital markets and ask themselves: Why has so little been done about the Capital Markets Union since the Juncker Commission's plans in 2015? How exactly could standardisation work? What form of regulation would be necessary to avoid the mistakes of the past? And last but not least: Will the capital markets union solve the EU's financing problems?
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