Following a European Commission announcement in March of a proposed new legal framework for start-up companies, Germany has reportedly lifted its opposition to giving more powers to an EU financial regulator – an important step towards creating a capital markets union. According to The Financial Times, the German finance minister Lars Klingbeil signalled his support for the centralised supervision of a unified capital market, which would effectively mean ceding powers from the German regulator to the European Securities and Markets Authority (ESMA), based in Paris. He told the newspaper that the goal of a stronger and more resilient Europe is more important than “clinging to national interests.”
His remarks coincided with a meeting of six EU member states on 28 May to discuss advancing a capital markets union. The need for a union was highlighted by the former Italian prime minister Mario Draghi in a 2024 report saying that Europe urgently needs to improve its competitive position. He argued that a unified market would redirect private capital to more advanced industries and raise productivity across the region.
On 18 March, the Commission proposed a legal framework that would enable entrepreneurs and innovative companies to launch across Europe using a single harmonised set of corporate rules. This has still to be approved by the European Parliament and the Council of Ministers. It is part of a broader initiative to develop a larger, single market for individuals and companies and grow the economy. Currently, the EU is home to more than 30 national and regional stock exchanges, each with its own regulations.
Representatives of the six countries that met on 28 May discussed how to increase the direct supervisory powers of ESMA over share trading and other financial transactions. The regulator was set up in 2011 to issue guidelines for the EU member states.
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