European flags fly in front of the European Commission headquarters in Brussels, Belgium, March 13, 2023. REUTERS/Yves Herman/File Photo Acquire LICENSE RIGHTS
BERLIN, Sept 13 (Reuters) – The European Union must take further steps towards a single capital market to improve access to finance to finance growth areas such as new technologies, French and German finance ministers said on Wednesday.
“The American capital market is incomparably more efficient than the European one because we basically have 27 individual capital markets,” said Federal Finance Minister Christian Lindner in a joint press conference with French Finance Minister Bruno Le Maire and German Economics Minister Robert Habeck.
The ministers spoke after Le Maire joined the German cabinet as a guest at its weekly meeting.
“The lack of a capital markets union is a structural obstacle to the success of the European economy,” said Le Maire.
Ministers presented a common roadmap on what needs to be done to unlock the potential of private capital markets for the EU, with a focus on improving market access for small and medium-sized enterprises.
Lindner said what distinguishes the European Union from the United States is not the amount of public funding, but the efficiency of private capital markets.
There is no shortage of public funding in the EU, he said, pointing out that there is more public funding available under the 800 billion euro ($860 billion) Next Generation EU program than in the U.S. American Inflation Reduction Act with $369 billion in subsidies.
However, there are differences between private funds.
“In order to finance future tasks, technologies and transformations, it is therefore important to mobilize the private capital that we have in Europe,” said Lindner.
This includes promoting sustainable finance so that the capital markets also pursue sustainability goals, optimizing exit opportunities through IPOs and increasing the attractiveness of the stock exchange location.
“Together with France, we want to continually review rules of action and obstacles,” said Lindner. “We want to work to make regulation and supervision in the financial market sector more agile, adaptable and cost-effective.”
($1 = 0.9315 euros)
Reporting by Maria Martinez, Editing by Rachel More and Sharon Singleton
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