By Philip Blenkinsop
BRUSSELS, Dec 4 (Reuters) – Europe’s executive Commission proposed measures on Thursday to make the 27-member bloc’s capital markets more competitive by easing cross-border operations and giving broader oversight to the European Securities and Markets Authority.
The EU is struggling to compete economically with the United States, China and other rivals, but could boost its competitiveness by bolstering its single market, which functions well for the exchange of goods, but less well for services.
Former Italian Prime Minister Enrico Letta, who wrote a report on improving the single market last year, said the greatest overall impact could come from steering the 33 trillion euros ($38.53 trillion) of private savings to the real economy. Now about a third of it is held in current accounts.
Letta said the 300 billion euros of family savings heading overseas, principally to the United States, highlighted the deficiencies of the EU’s fragmented markets as did the 2024 market capitalisation of respective stock exchanges; in the EU it is 73% of GDP compared with 270% of GDP in the U.S.
The European Commission’s proposals, which will need approval from EU governments and the European Parliament, would ease operations across EU borders with enhanced passporting for regulated markets, as well as central securities depositories.
They would allow pan-European trading venues to streamline corporate structures and licences into a single entity and relax limits on digital ledger technology, which typically refers to blockchain, the technology behind crypto assets.
Oversight of major infrastructure such as trading venues, central counterparties, CSDs and crypto-asset providers would be transferred to the European Securities and Markets Authority (ESMA), which would also have a greater coordinating role for asset management.
France, home to ESMA, has long pushed for it to be given greater power. ESMA head Verena Ross has said she would welcome the move, but it faces resistance from some EU members.
Financial regulators in France, Italy and Austria called for ESMA to take over supervision of major crypto firms. Malta’s financial regulator, which came under scrutiny for its licence-granting process earlier this year, has said it opposes giving more crypto supervision power to ESMA.
($1 = 0.8565 euros)
(Reporting by Philip Blenkinsop in Brussels and Elizabeth Howcroft in Paris; editing by Philippa Fletcher)
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