Gentiloni: If no EU consensus, member states will set up smaller-scale capital markets union

by Thomas Moller-Nielsen

Member states keen on integrating their capital markets will likely move ahead by themselves if no EU-wide consensus can be reached, European Commissioner for Economy Paolo Gentiloni said on Monday (13 May).

“We should move forward as a union, and we are all committed to doing so,” Gentiloni said after the meeting of eurozone finance ministers in Brussels, following a question by Euractiv. “But I expect that if strong progress will not be possible, some member states will move in a different way of cooperation.”

“This is not the Commission’s suggestion or authorisation,” he noted, “This is what I expect.”

Gentiloni’s remarks reflect growing frustration among many EU policymakers about the lack of progress in deepening the bloc’s Capital Markets Union (CMU), plans for which were first announced in 2015.

At a special EU leaders summit last month, member states adopted some of the CMU recommendations put forward by former Italian prime minister Enrico Letta, such as aligning insolvency rules and lowering regulatory requirements on securitisation.

However, they stepped short of calling for a single market supervisory mechanism and the harmonisation of corporate tax regimes.

In February this year, French finance minister Bruno Le Maire said he was “fed up with empty statements” regarding the CMU and called for states to integrate their capital markets “on a voluntary basis”.

“If we have at the beginning three to four countries joining that initiative … it will be a good basis,” Le Maire said.

In an interview with Euractiv ahead of the Brussels meeting on Monday, Eurogroup President Paschal Donohoe said he hoped Le Maire’s comments would “act as a catalyst for how we can generate policy momentum” for CMU integration.

Standing alongside Gentiloni at a press conference following the meeting on Monday, Donohoe said, “I think Commissioner Gentiloni was just acknowledging that this [voluntary CMU integration] is a possibility” and reiterated his hope that such remarks will spur further policy action.

Donohoe also emphasised that his “very strong preference is to see progress on capital markets happen across all member states of the European Union”.

*first published in: Euractiv.com