A decade after the launch of the Capital Markets Union, it can be said that the degree of progress has been much less than expected and that the need to effectively promote this project is greater than ever, since fragmentation limits competitiveness and the ability to mobilize investments towards companies. The first action plan, with a horizon of 2019, reached relevant milestones such as the simplification and harmonization of issue prospectuses and the revitalization of securitization. However, other initiatives of a more political nature, such as the elimination of tax barriers to cross-border investment or the creation of common insolvency processes, remained pending. Subsequently, with a less ambitious nature, a second action plan was launched focused on post-covid recovery and the green transition. Today, the integration of capital markets is once again on the political agenda with a new strategy, renamed the Savings and Investment Union (SIU), focused on connecting citizens with companies so that the former prudently increase the profitability of their savings and the latter finance their investment needs. This strategy is specified in a legislative proposal presented on December 4, which proposes measures in different areas. The creation of a Pan-European Market Operator status for securities trading and the simplification of cross-border processes for central securities depositories are planned. In asset management, the aim is to facilitate the entry of funds into the single market. It also seeks to support innovation through distributed registry technologies. In the regulatory and supervisory sphere, the central axis of the proposals, the aim is to simplify regulations and reduce national discretion by transforming directives into regulations. Likewise, it is proposed to centralize powers in ESMA (European Securities and Markets Authority), which would assume direct supervision of significant and cross-border market infrastructures (central counterparties, central securities depositories and trading venues) and of all cryptoasset service providers. The urgency of these reforms is explained by the gap with other markets: in 2024, stock market capitalization in the EU represented 73% of GDP, compared to 270% in United States. Among the causes, the European Commission points out that the diversity of requirements and practices makes cross-border operations difficult and limits opportunities. No wonder: in Europe there are more than 300 markets. The package presented simplifies the regulatory framework and aims to improve the functioning of the single market for financial services for the benefit of investors, companies and the Union economy. It is a step in the right direction, although significant obstacles remain that will require urgent and ambitious attention to achieve a truly single capital market. Irene Peña and Patricia Muñoz are professors at Afi Global Education.
