Nurturing growth in Europe
Commissioner Jonathan Hill, European Commission
“We need deeper capital markets so that more businesses can get the funding they need”
Commentary by Commissioner Jonathan Hill, Financial Stability, Financial Services & Capital Markets Union, European Commission
Welcome to London Stock Exchange Group’s first ever 1000 Companies to Inspire Europe report. The companies you will find in here are all remarkable examples of European hard work and entrepreneurship. They come from all 28 EU countries and from a wide range of business sectors. Taken as a whole, they are growing at 71% a year and over the past two years have increased their staff by 66%.
This report gives these companies the recognition they deserve. But I hope it will do more than that. I hope that by providing investors with a selection of companies with great potential, 1000 Companies to Inspire Europe will make it easier for them to find opportunities and channel investment to SMEs that want to grow and compete in bigger markets.
Improving the funding conveyor belt for business is at the heart of the work I’m doing to build a single market for capital – what we are calling a Capital Markets Union (CMU). We want to increase funding choices for companies so that more businesses can get the financing they need at each stage of their development. And help money flow throughout the EU to where it’s most productive.
If we’re serious about supporting growth and jobs in Europe, we need deeper capital markets so that more businesses can get the funding they need. And if promising companies can’t get financing in Europe, they will vote with their feet and look for it elsewhere, taking all that potential with them.
To help tackle this problem, we have come forward with a range of measures as part of the CMU. To help companies in their start-up phase, we are making a push to strengthen the European venture capital markets to build up scale, diversity and choice. To free up bank lending for smaller companies, we have made a proposal to restart Europe’s securitisation markets. For companies that are growing, we’re overhauling the Prospectus Directive to create a simpler, faster and cheaper prospectus regime.
But I also want to knock down some longstanding barriers to cross border investment. This year we will bring forward proposals to try to reduce differences between national insolvency regimes. We will launch a consultation to improve the passporting system for investment funds so they can operate more easily right across the EU. And to inject more savings into capital markets, we are considering ideas for a European market for simple personal pensions.
We have got off to a good start with the CMU, but this is just the beginning. I am determined to keep up the pace. I want to see more private sector-led initiatives like the 1000 Companies to Inspire Europe report as we go along. And I look forward to working with the LSEG and the rest of the financial sector to deliver the increased investment and growth that Europe needs.