Changes from plenary report to adopted text

2. Welcomes the renewed debate on the need to restore EU competitiveness and productivity and economic growth, boosted by the Draghi and Letta reports; recalls that productivity gains could be achieved mainly through investments in innovative activities, including in the transitions; points out that competition can stimulate productivity, investment and innovation;

3. Embraces the Draghi and Letta reports as one of the numerous wake-up calls for European and national decision-makers, as well as a starting point for action to foster both private and public investments, and notably for the tech sectors in transition, the transitioning automotive sector and heavy industries such as the steel and chemicals industries; welcomes the fact that the Commission acknowledges the role of public finance in mobilising private finance and supporting innovation in the EU; points out that the lack of progress in integrating EU financial markets has often been due to reservations on the part of the Member States; calls on the Member States to make use of the existing momentum and work together with Parliament to truly advance the integration of EU financial markets; recalls that the European Union’s efforts to complete the CMU have not yielded a definitive result since 2015; encourages all parties to make efforts towards achieving a savings and investments union as soon as possible;

4. Notes with concern the risks of negative shocks to economic growth and the ongoing turmoil in financial markets and geopolitical uncertainties that could threaten the prosperity of European citizens, workers and businesses in particular; notes that geopolitical uncertainties have already significantly increased financial market volatility and contributed to the weakening of the US dollar, and that security is a precondition for sustainable growth;

5. Recognises that the EU’s robust regulatory framework has contributed to its financial stability; considers that this legislative stability and predictability could become a genuine comparative and competitive advantage, as these factors are critical for international investor confidence; highlights the intrinsic link between the rule of law and sustainable and competitive economic growth; highlights that the robustness of the financial sector is a key element of its competitiveness;

6. Acknowledges the work that has taken place to build a capital markets union up to now, starting with the ‘Action Plan on Building a Capital Markets Union’ in September 2015; regrets that progress in integrating EU capital markets since then has been limited and calls for this process to be accelerated; welcomes, in this respect, the adoption of the Commission communication entitled ‘Savings and Investments Union - A Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU’ that outlines various policy initiatives and aims to integrate EU financial markets and to channel savings into investments effectively;

7. Highlights the importance of strengthening confidence in the banking system, and that ensuring financial stability and promoting an efficient single market are fundamental EU objectives; recognises that the completion of the Banking Union must be a strategic priority in deepening the Economic and Monetary Union; calls on the Council to speed up the adoption of remaining legislation to secure its financial stability framework and to finalise the Banking Union;

8. Insists on the urgency of taking action, speeding up decision-making, reducing implementation delays and accelerating decisions regarding EU instruments and support mechanisms;

9. Considers that the Union must advance with its CMU to leverage private sector investments; emphasises that it will also require public sector support to deliver the minimum annual additional investment needed to restore a sustainable and innovative industrial sector and anchor the Union’s prosperity; highlights that an increase in productivity would also generate a larger fiscal space;

10. Highlights that too much capital is not used productively in the EU; highlights that businesses, especially SMEs, are unable to take full advantage of existing capital markets in Europe for financing and investment;

11. Regrets the fact that many EU-based entrepreneurs feel the need to relocate to gain easier access to finance and resources; notes with concern that the lack of large-scale venture capital funds and financially viable exit possibilities in the EU propel them to scale up with foreign investments and in foreign markets; notes that this is due to the lack of an integrated CMU in the EU and to the fact that EU markets are not yet able to meet their needs; recalls that the EU generates more start-ups than the United States per year and that the return on venture capital investments is around 6 % higher in the EU than in the US, underlining the need for EU institutions to foster a more attractive and supportive environment for innovation and growth; concurs with the Draghi and Letta reports that the EU should further develop its venture capital markets, and consequently stresses the importance of developing a strong ecosystem for venture capital and investment in the EU and calls for the formation of venture and risk capital for companies to obtain investment in our markets, such as sufficiently large European growth and buyout funds; highlights that public support to venture capital markets should prioritise projects aligned with EU priorities;

12. Highlights that European financial markets need to be attractive and easy to access for both issuers and investors; underlines that this applies to both primary and secondary markets; highlights that the decision to list on a regulated market often comes with additional requirements for companies, also to protect investors; notes that such requirements can be perceived as a disadvantage of going public; calls on the Commission to continuously monitor and reduce the administrative and compliance costs for publicly listed companies, in particular for small and medium companies; welcomes the recently adopted Listing Act as a first step in this regard, making it easier for companies of all sizes, including SMEs, to list on European stock exchanges; calls for a pragmatic implementation of the Listing Act and calls on the Commission to further build on this initiative, in particular as regards equity research for SMEs and by strengthening SME growth markets, which have helped smaller companies to go public;

13. Stresses that public investment plays a crucial role in complementing private investment; urges the Commission to issue proposals that will aim at mobilising additional capital to also support the objectives set out in Article 3 of the Treaty on European Union (TEU); believes that financial instruments and budgetary guarantees represent an efficient use of resources to advance key EU policy objectives; reiterates that well-designed budgetary guarantees and financial instruments, when based on market needs, are a highly efficient use of limited EU budgetary resources to de-risk investment and crowd in private capital;

14. Emphasises that public resources should be focused on ensuring the quality, efficiency, sustainability and accessibility of public services and infrastructure, especially those related to services of general interest, while catalysing private investment in innovative and clean technologies and industries under well-defined conditions;

15. Emphasises that closing the investment gap is not solely a matter of mobilising large financial volumes, but of ensuring that the EU is equipped to channel funds into productive investments; underlines that institutional capacity, regulatory clarity and project quality are critical to the effective use of public and private capital; notes, in this respect, that, on account of a number of factors, including limited access to a broader market portfolio, product quality and fees, many EU products do not offer sufficient returns;

16. Recalls that productivity gains could be achieved mainly through investments in innovative activities; recalls that the target of investing 3 % of GDP in research and innovation is still far from being achieved; calls on the Commission and the Member States to ensure sufficient financing and tools to achieve that target;

17. Regrets that the low level of financial education in many Member States represents a significant challenge to citizens’ economic autonomy and to the development of a strong and competitive economy; recalls that poor financial education hinders the population’s ability to make informed decisions about saving, investing and retirement planning; affirms that this gap in financial education hinders the development of an investment culture that is crucial for economic growth; underlines the importance of an ambitious, measurable and determined EU strategy to promote financial literacy in Europe, empowering citizens to better protect and mobilise their savings and to build on a more attractive capital market;

Mobilising private investment and easing access to finance by developing a savings and investments union

18. Welcome the self-imposed goal by the Commission to be an ‘investment Commission’ and unlock the financing needed for the green, digital and social transitions, to maximise synergies between public and private investment, and to leverage and de-risk private capital;

19. Believes that the attractiveness of EU capital markets will be increased by further integration of the EU internal market in a way that fosters competition among EU companies, the creation of economic opportunities for private investments and simplification, allowing higher returns for citizens and companies; underscores that returns are, however, undermined by the high costs associated with investments in European financial markets; calls on the Commission and the Member States to develop solutions, whether legislative or otherwise, to foster the creation of an integrated EU-wide capital market that has sufficient size, liquidity, depth and transparency to attract both EU-based and international investors while ensuring consumer protection and safeguarding financial stability; recalls that the prospect of higher investment returns is a key incentive for retail investor participation in capital markets; stresses, in this regard, that the CMU will not be possible without completing the Banking Union;

20. Notes that European capital markets currently remain highly fragmented, with European investment funds remaining nearly seven times smaller than US funds; considers that this harms the competitiveness of the EU investment fund sector vis-à-vis global competitors, as fund size is a key factor influencing the costs charged to end-investors; believes that a more integrated cross-border fund market in the EU could lead to increased fund sizes over time and to efficiency gains that, if passed on to retail investors, could help to lower costs and deliver better value for money for end-investors;

21. Believes that the CMU will benefit consumers and SMEs by offering high-yield investment opportunities in the real economy and eventually boost the venture capital market by improving access to diversified funding sources; believes that financing European scale-ups with European capital should be a priority, as exemplified by the European Tech Champions Initiative launched in February 2023 to finance promising European tech companies;

22. Considers that venture capital should become more widely accessible to companies as an alternative to traditional bank lending in order to diversify funding sources; calls on the Commission to propose measures to enhance this type of financing for EU companies;

23. Points out that the size, depth and liquidity of capital markets vary greatly from Member State to Member State, with some Member States having been significantly more successful in providing attractive primary and secondary markets for businesses and inducing citizens to invest in those markets; calls on the Commission to identify best practices and integrate them into the savings and investments union workstream;

24. Considers that private capital will be instrumental in closing the investment gap identified by the Draghi report in the most efficient manner;

25. Supports the integration of institutional frameworks and market structures; reiterates its call to foster the process of supervisory convergence led by ESMA, including by granting ESMA direct supervisory powers where this brings European added value – for example, over pan-European market infrastructures – in order to enhance the competitiveness of European listing markets and improve the efficiency of the supervisory landscape and collaboration with the national competent authorities (NCAs); recalls that ESMA already has direct supervisory powers over several financial entities, such as credit rating agencies, trade repositories and Tier 2 Central Counterparties located outside the EU;

26. Recognises also that harmonised supervision does not always require a single supervisor but can also be achieved through the convergence of national supervisory practices, where this is more appropriate; supports, therefore, the Commission’s intention to propose measures to strengthen supervisory convergence tools and make them more effective, and to achieve more unified direct supervision of capital markets by transferring certain tasks to the EU level;

27. Points out that any increase in the powers of the European supervisory authorities (ESAs) should go hand in hand with a commensurate increase in the level of the ESAs’ accountability; considers that the governance of ESMA should be revised to guarantee the efficiency and independence of ESMA’s decisions; supports the proposal in the Draghi report to grant ESMA a more European governance structure and to establish strong cooperation with national supervisory authorities, drawing on the model of the Single Supervisory Mechanism or the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA);

28. Considers that the ESAs should be adequately funded in order to be able to carry out their duties, including by involving financial institutions and financial market participants from supervised firms;

29. Stresses the importance of a strong role for the European Central Bank (ECB) in overseeing systemically important market infrastructures, in line with its responsibilities under the Treaty on the Functioning of the European Union (TFEU) and the SIPS Regulation; believes that the ECB should actively contribute to enhancing the interoperability, resilience and integration of EU-wide trading and post-trading systems, particularly through its oversight of platforms such as TARGET2-Securities;

30. Stresses that the administrative burden and compliance costs that occur in a cross-border context could already be addressed through better coordination and cooperation among national supervisory authorities, e.g. in the area of data sharing; calls on the Commission and the ESAs to move towards a ‘report only once’ regime; considers the European Single Access Point to be an important initiative in this regard and calls for its timely implementation; suggests that ESMA could also become a central data hub, centralising the reporting of entities subject to reporting requirements under MiFiR and EMIR;

31. Urges the Commission to develop proposals to support the relocation of clearing activities to the EU; regrets the current situation, in which the bulk of the EU clearing business is conducted outside of the EU; looks forward to an ambitious delegated act on active accounts under EMIR 3.0; invites the European Commission to continuously assess the development of clearing activities and the impact of the regulation, and to put forward further legislative proposals to strengthen the EU’s clearing ecosystem;

32. Welcomes the Commission’s announcement of an ambitious package of legislative proposals to strengthen the trading and post-trading ecosystem in the European Union, remove barriers to cross-border activity and make the framework fit for new technologies; expects that such a proposal could help address market fragmentation in the EU; stresses, however, that most initiatives towards market consolidation should be market-driven;

33. Recognises the need for efficient and liquid capital markets to boost investments, including a competitive post-trading market infrastructure; welcomes the Commission’s legislative proposal to introduce a targeted amendment to the Central Securities Depository Regulation (CSDR) with the aim of shortening the settlement cycle in the EU from two days (‘T+2’) to one (‘T+1’) for transactions in transferable securities executed on trading venues; points out that this initiative allows the EU to catch up with other jurisdictions that have already completed the move to T+1 and avoids misalignment; expects that the proposal will increase the efficiency and resilience of EU capital markets, including through lower risks of settlement fails, quicker availability of securities and funds and lower margin requirements; notes with concern that other jurisdictions, such as the United States and India, are exploring or piloting T+0 settlement cycles; calls on the Commission to urgently initiate a technical and regulatory assessment of the feasibility of moving to T+0 settlement, in close coordination with market infrastructures, central banks and market participants; highlights that further shortening the settlement cycle would reduce systemic risk, enhance market efficiency and strengthen the attractiveness of EU capital markets globally;

34. Notes that streamlining administrative procedures can improve the EU’s attractiveness as an investment destination; considers that aligning Member States’ legislative frameworks, while preserving national competences and minimum standards, should be part of the simplification agenda to ease cross-border activities; recalls that relying on regulations rather than directives would reduce divergences in the implementation of EU legislation, including gold plating, and thereby support the ongoing simplification exercise; calls on the Commission to apply the Better Regulation principle, guaranteeing harmonisation where impact assessments indicate a clear added value and tackling fragmentation; underlines the possible gains from streamlining the EU Sustainable Finance Framework, as highlighted in the Draghi report, particularly through enhanced clarity, consistency and guidance; notes, in this regard, the Commission’s Sustainability Omnibus Package;

35. Considers that the first step towards simplification consists in efficient legislation; calls on the Commission to ensure the involvement of the ESAs in the decision-making process for Level 2 and Level 3 mandates to guarantee that these mandates are evidence-based, proportionate and tailored to the needs of the financial sector; invites the Commission and the ESAs to also evaluate how to reduce the number and complexity of upcoming delegated acts, implementing acts, Q&As and guidelines; stresses that the ESAs should strictly adhere to the mandate provided by the European legislator;

36. Welcomes the recent adoption of the Listing Act, which will make it easier for companies of all sizes, including SMEs, to list on European stock exchanges; underlines that the Listing Act’s Level 2 provisions should contribute to a more accessible and cost-effective listing environment across the Union;

37. Calls on the Commission to address the fragmentation of national insolvency frameworks and to establish effective mechanisms for resolving cross-border disputes; underlines that greater legal convergence and procedural clarity are essential to reduce barriers to cross-border investment and to support deeper integration of EU capital markets;

38. Remains committed both to achieving the overall objectives of the sustainable finance framework and to mobilising public and private investments in the transitions; recalls that revenues from the Emissions Trading System will be key to supporting investments for climate- and energy-related purposes under the budgets of both the Member States and the Union; takes notes that the Commission reasserted its ambition to remain the global leader in sustainable finance at the start of its current term; notes that the Commission is currently critically assessing all elements of the sustainable finance framework and might come forward with simplification proposals;

39. Calls on the Commission to adopt a proposal for reviewing the Sustainable Finance Disclosure Regulation (SFDR), including addressing greenwashing risks;

40. Stresses that high energy prices negatively impact EU competitiveness; welcomes, in this regard, the proposal made in the Draghi report; calls for the application of the ‘same activity same rule’ principle and for a review of the ancillary activity exemption that enables non-financial companies to trade on energy derivatives markets without being subject to the same scrutiny as financial entities;

41. Highlights that companies that access capital markets experience significant growth, as this enables them to fund their expansion, innovation and development projects; contends that by obtaining resources from a broader base of investors, these companies can diversify their funding sources; believes that stimulating initial public offerings (IPOs) is essential for the growth of European businesses and the further integration of EU capital markets; calls for the implementation of measures that reduce regulatory barriers and enhance access to capital, ensuring that SMEs can easily access capital markets without excessive costs or complexity;

42. Fears that without a clear and coordinated strategy, the number of IPOs in the EU will remain limited, hindering the growth potential of European companies and reducing the attractiveness of EU markets for global investors;

43. Recalls that EU regulations, such as the Prospectus Regulation and MiFID II, have made strides in improving transparency and market efficiency, although more can be done to streamline processes for companies looking to go public; highlights the need for further harmonisation of market practices across Member States to create a truly single capital market; defends the application at EU level of best practices;

44. Notes that the Union’s current tax framework, with 27 different corporate tax systems, can create barriers to businesses and cross-border investment in the internal market; believes that innovative companies could benefit from a single set of EU-wide rules, where relevant, and common practices; notes, in that regard, the ‘Business in Europe: framework for income taxation’ proposal establishing a single set of rules for calculating companies’ corporate tax bases; recalls that several legislative initiatives in the field of taxation are still on hold and that it is important to guarantee certainty, predictability and stability; takes note of the Commission’s clarifications of which initiatives are to be withdrawn in the field of taxation;

45. Recalls that most taxation matters fall within the national competence of the Member States; stresses, however, that a more coordinated framework for corporate taxation could help to cut compliance costs and reduce the administrative burden, and also to create a level playing field for businesses operating across the internal market, encourage expansion, enhance legal certainty and stimulate investments and growth in the Union; urges the Member States to speed up negotiations on depreciation rules, in particular; invites the Commission to explore and assess the benefits and drawbacks of the option of the 28th regime;

46. Calls on the Commission to implement measures that incentivise both domestic and external investors to participate in European capital markets; calls on the Commission to provide technical support to Member States in designing and implementing tax policies that encourage investment;

47. Takes note of the Draghi report’s recommendation to provide tax incentives in support of developing strategic sectors; considers that tax incentives linked to investment products should prioritise investments made in Europe to support European competitiveness;

48. Welcomes, as a first step and to reduce the complexity and fragmentation of the internal market, guidelines from the Commission on the design of tax incentives, while respecting the national competences of Member States;

49. Calls on the Commission to address existing barriers to cross-border retail investments, such as overly complicated procedures to recoup withholding taxes and the lack of EU-wide minimum standards for general shareholders’ meetings;

50. Underlines that capital market integration is a necessary pillar of the Union’s investment strategy, which can, where efficient, be complemented by carefully designed incentives on long-term products to maximise impact;

51. Calls on the Commission to develop proposals aimed at facilitating the channelling of savings via long-term saving products to productive investments, building on national experiences that have demonstrated strong retail uptake; asks the Commission to explore solutions and study ideas such as creating an EU investment savings account that would be accessible to all EU citizens or a label at EU level for investment products suitable for retail investors on the basis of common criteria or features such as ‘non-complex products’, proportionate costs, a long-term investment focus, asset allocation and risk mitigation techniques; urges the Commission to introduce a simplified and streamlined advice segment or guided execution only segment for products labelled as basic and simple; asks, in particular, that the Commission assess the added value and effectiveness of, and the appetite of companies and citizens for, a label for investments that offer reward opportunities for investors globally or that are sustainable and mostly located in the EU (Invest or Made In Europe label); stresses that such an initiative should aim to generate additional savings while safeguarding, and where possible enhancing, the diversity of products, distributors and market structures across the Union; notes that some Member States are moving forward with a ‘Europe of the willing’; urges the Commission and the Member States to be as ambitious as possible and to move forward as a bloc;

52. Takes note of the launch of the ‘Finance Europe’ European Long-Term Savings label by seven Member States in association with their national financial industries; notes that the criteria for such a label include a portfolio allocation in which at least 70 % of assets are invested in European companies, a minimum investment duration of five years, a substantial part invested in equity and possibly nationally designed tax incentives;

53. Recalls that existing pan-European products, such as European long-term investment funds (ELTIFs) and pan-European personal pension products (PEPPs), have so far had difficulties gaining meaningful traction among retail investors; acknowledges ongoing reforms aimed at enhancing their appeal, but stresses that experience shows that regulatory design alone is insufficient to drive uptake;

54. Stresses that strong consumer protection is essential to foster trust and boost participation in European investment products; underlines the need for clear disclosures, transparent and low fee structures, access to basic financial services to promote financial inclusion, robust regulation of digital tools such as artificial intelligence (AI) deployed by financial institutions when selling and providing advice on European financial products and robust regulation and standardisation of financial products, complemented by targeted financial education initiatives;

55. Urges the Commission to support the development of a European Capital Markets Union Index Family based on data that will be made available under the future EU-wide Consolidated Tape, which would give greater visibility to smaller and less liquid national markets in the EU and allow European citizens to easily invest in mid- and small-cap equities across all EU Member States; considers that this index family should cover all publicly listed stocks in the EU and should allow sub-indices for individual countries, regions and sectors to meet the diverse needs of investors, issuers and their exchanges; stresses that the development and management of the indices, as well as their use by market participants, should be cost-efficient in order to minimise the burden on market participants and maximise positive second-round effects, such as increased stock listings and new financial products;

56. Highlights the importance of improved access to up-to-date pricing and product information for retail investors, and to opportunities for bespoke offerings; calls for measures to make such information more easily accessible;

57. Recalls that pension systems and their financing models largely depend on national specificities; stresses that pensions help protect pensioners, build capital markets and mobilise investment systems, and must prioritise stability, solidarity and the provision of adequate and predictable income in retirement; highlights that strong retail saver protection safeguards should be considered in the development of pillar 2 and pillar 3 pension products;

58. Believes that pension tracking systems can give European citizens a clearer overview of the pension entitlements that they can expect in retirement; urges the Commission to ensure that all Member States introduce simple and transparent pension tracking systems that are easily and freely accessible to citizens;

59. Points out that intermediaries such as pension funds and insurance undertakings play a key role in channelling private savings into productive investments; expects that the Commission will adopt an ambitious delegated act on long-term guarantees and long-term equities under Solvency II that fully reflects the agreement reached by the co-legislators on the Solvency II amending directive and takes into consideration the relevant recommendations of EIOPA;

60. Expects the Commission to develop solutions that allow companies, including growing start-ups, microenterprises and SMEs, to scale up and list within the EU; asks, therefore, that the future EU start-up and scale-up strategy include a chapter on finance, in particular on venture capital, outlining the right incentives for European start-ups and scale-ups not to relocate to countries outside the EU and aimed at creating an attractive and open investment environment that welcomes both EU and global investors wishing to invest in the Union; highlights the importance of attracting talent to the EU in order to ensure long-term economic growth, innovation and global competitiveness; highlights the need to deepen the integration of EU primary markets by advancing regulatory convergence and facilitating cross-border listings; recognises that SME growth markets are a vital entry point into capital markets for SMEs and should be made more accessible through streamlined requirements;