Actieplan voor integratie van financiële markten van groot belang (en)

The European Commission's latest (9^th) Progress Report on the Financial Services Action Plan (FSAP) concludes that the FSAP has been one of the driving forces behind the developing European capital market, and so has improved prospects for sustainable, investment-driven growth and employment. Progress towards adopting the legislative measures of the FSAP has been maintained. Nevertheless, the Report argues that given the European Parliament elections and EU Enlargement next year, it is crucially important that the remaining major FSAP measures are agreed in the next four months. The report also outlines the initiatives taken by the Commission to assess the current state of integration of European financial markets. The full text of the Commission's progress report is available at: <A onclick="popup(this.onclick="popup(this.href+'&noframes=1',0,0);return false" href+'&noframes=1',0,0);return false" HREF="http://europa.eu.int/comm/internal_market/en/finances/actionplan/index.htm">http://europa.eu.int/comm/internal_market/en/finances/actionplan/index.htm

Internal Market Commissioner Frits Bolkestein said: "I would like to pay tribute to all the EU institutions for their hard work to integrate European financial markets on time, which can involve some difficult compromises. Nevertheless, we now need to wrap up agreement on the remaining FSAP measures before April 2004 if we are to meet the deadlines set at the Lisbon European Council, and to deliver real benefits to European businesses and consumers. Without financial markets that function efficiently, the recovery of the 'real' economy will be greatly impaired. Now that we are coming round the final bend, we need to make one final sprint to ensure victory."

Main Conclusions

The legislative timetable for adoption of FSAP measures has continued to be respected, as was the case in earlier Progress Reports: 36 of the 42 original measures have been finalised. Member States, the European Parliament and industry have constantly reaffirmed their overall support for the underlying objectives of the FSAP. This broad-based commitment has not been thrown off course by depressed economic conditions and the steep negative correction in equity valuations since the fourth quarter of 2000. So far, the European financial system has itself been resilient to the recent shocks; the risks associated with increased volatility have been spread more effectively and equally over financial sectors.

Recent steps forward

The Report sets out recent successes in moving the FSAP towards completion. In June 2003, the Directive on Taxation of Savings Income was formally adopted (see IP/03/787), followed in July by the adoption of the Prospectus Directive (see IP/03/1018).

Meanwhile, in October, another important milestone has been passed: endorsement of the first technical implementing measures on the Market Abuse Directive by the European Securities Committee (ESC).

As a follow-up of the short term priorities included in the Communication on Company Law and Corporate Governance of 21 May 2003, the Commission presented a new proposal for the 10^th Company Law Directive on cross-border mergers on 18 November 2003 (see IP/03/1564 and MEMO/03/233).

A crucial adjunct to the FSAP has been the enhancement of arrangements for the effective supervision of financial institutions and the management of financial crises with a cross-border dimension. A key development in this regard is the emergence of structured arrangements to allow regulators and supervisors to organise their co-operation and mutual agreements.

On 5 November 2003, the Commission adopted a package of seven measures aiming to establish this new organisational architecture in all financial services sectors (see IP/03/1507). The result will be that for each of the main financial sectors, there will be two committees: one composed of national regulators to assist the Commission in adopting technical implementing measures; a second one to bring together national supervisors to provide the Commission with technical advice on implementing measures, but also to ensure consistent implementation of EU law in Member States. This package is needed urgently if the FSAP is to be implemented and enforced effectively.

Looking ahead

The Council and European Parliament are strongly urged to adopt promptly the proposals already issued on the revision of the Investment Services Directive (see IP/02/1706 and MEMO/02/257), already scheduled for adoption by the Council of Ministers in early December 2003. Furthermore, adoption of the Transparency Directive, aiming at increasing the transparency of listed companies to improve investors' trust and encourage a more rational and efficient allocation of resources is urgently needed (see IP/03/436 and MEMO/03/68). Finally, the proposed Takeover Bids Directive (see IP/02/1402 and MEMO/02/201) is currently under discussion in the Council and the European Parliament.

The case for completing the FSAP remains as strong as ever:

• the FSAP will reinforce safeguards for financial stability and market integrity

• it is paving the way for a framework for the implementation and enforcement of common EU financial legislation

• it must ensure that the new markets after enlargement will be absorbed smoothly into the EU regulatory system.

The emphasis must therefore remain firmly on delivering and implementing all agreed measures.

The Commission does not intend to come forward with a complete new programme of measures in the area of financial services in the short term, but is working on two broad policy goals, where over the coming years more work is needed:

• common implementation and enforcement, inter alia by developing networks of financial regulators and supervisors

• the global dimension of the European financial market with, at its centre, relations with the United States.

Beyond these already programmed commitments, the Commission believes that there is much to be gained by launching a wide-ranging, transparent and bottom-up assessment of the effectiveness of FSAP measures to date, and to map out the state of integration of EU financial markets following the completion of the legislative phase of the FSAP. The overall objective of this stock-taking is to arrive at a broad understanding of the extent of any remaining gaps in the regulatory, supervisory, administrative, and public policy framework. This will increase understanding of the impediments to undertaking cross-border financial business.

The preparatory work of the assessment project will take place at the level of the principal financial sectors in the form of sectoral expert groups (see IP/03/1507). These have been constituted to cover the following areas: banking, insurance, securities, and asset management. The composition of the groups ensures a geographically balanced coverage of all main business lines and functions.

Apart from identifying impediments to the effective integration of markets for different financial products, services and transactions, the expert groups have also been tasked with helping the Commission to understand which market failures give rise to the biggest opportunity costs for Europe. To this end, the sectoral groups will focus primarily on the prioritisation of remaining impediments to cross-border business and their impact on the realisation of conditions for the smooth functioning of European financial markets.

To facilitate the involvement of, and input from, all interested parties, the Commission plans that the material emerging from the sectoral groups will also be subjected to public comment during the Summer of 2004.

Finally, the working papers and material from the sectoral groups could serve as a basis for a high level Forum in the Summer of 2004. This Forum would bring together the key decision-makers, experts and industry leaders. This event would have two purposes. First, it would represent an occasion for political stock-taking of the progress on the FSAP. Second, it would allow for high level exchanges between key policy makers and industry leaders on remaining challenges. In this respect, the event would not be an end in itself rather it would be a stepping stone to the development of new ideas and strategies.

Background

The Commission launched the FSAP in May 1999. At the Lisbon summit in March 2000, Heads of State and Government set a target date of 2005 for the FSAP to be completed. The target for the securities and risk capital markets is the end of 2003.

Research conducted for the Commission (see IP/02/1649) predicted that the integration of EU financial markets will bring significant benefits to businesses, investors and consumers. Conservative estimates from the research predict that EU-wide real GDP will directly increase by 1.1% - or €130 billion in 2002 prices over a decade or so. Total employment will increase by 0.5%. Businesses will be able to get cheaper finance: integration of EU equity markets will reduce the cost of equity capital by 0.5% and a 0.4% decrease in the cost of corporate bond finance is expected to follow. Investors will benefit from higher risk-adjusted returns on savings.