German insurers call for more ambition in the further development of the Capital Markets Union
The EU finance ministers have adopted a new action plan to harmonize national capital markets and thus facilitate investments. From the insurers' point of view, the proposals are not far-reaching enough.
Insurers generally welcome EU finance ministers' statement on the further development of the Capital Markets Union but are also calling for more ambition. "The Capital Markets Union has been a project for more than a decade, and progress so far has been insufficient," said Jörg Asmussen, Chief Executive Officer of the German Insurance Association (GDV).
"The European financial market is as fragmented as it was ten years ago. Governments must overcome their national egos in order for the Capital Markets Union to progress. The same applies to the related Banking Union project. A large and liquid capital market is a central building block for the EU's competitiveness in the global context. The new EU Commission should press ahead with the Capital Markets Union," said Asmussen.
"Among other things, it is important to improve the financing conditions for start-ups and to facilitate access to venture capital by removing regulatory barriers," said the CEO of the GDV. "A central stock exchange for IPOs in the EU, especially in the tech sector, would also be helpful to ensure that they take place in Europe. To this end, all the necessary regulatory conditions need to be put in place."
Harmonisation of insolvency laws, uniform disclosure requirements
"Further harmonisation of insolvency laws could facilitate cross-border investments, especially in view of the great financing needs for the transformation," Asmussen continued. In order for the harmonisation of insolvency laws to sustainably strengthen investors' confidence and thus willingness to invest in Member States, the position of creditors in insolvency proceedings must be improved.
Insurers also believe that strengthening a user-friendly investment environment through simple and understandable information and disclosure requirements is among the challenges for the next five years.
The action plan contains other interesting points for discussion, such as the question of how debt financing has so far been favoured over equity financing in tax law, as well as technical but important topics: "The European Single Access Point (ESAP) should be implemented quickly in order to provide investors with necessary information swiftly, for example on sustainability issues," said Asmussen. The non-legislative area of financial literacy is also key.
"By deepening the Capital Markets Union, even more people will be able to benefit from the advantages of a common capital market in future," Asmussen concluded.
With around €1.9 trillion in investments, the insurance industry is one of the largest institutional investor groups in Germany and newly invests around €300 billion every year. The customers of insurance companies therefore also benefit indirectly from a further integrated capital market.
