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MNI: France Backs Proposal For Joint EU Retail Bonds-Officials

A draft paper prepared by European Union finance officials with support from countries including France proposes a joint eurozone retail bond or a similar market-based savings product as part of a package aimed at injecting new momentum into plans for Capital Markets Union, with other proposals including an overhaul of market supervision, easing obstacles to stock market consolidation and further convergence of listing requirements.

The proposals in the paper seen by MNI were discussed in the Euro Working Group last week and will be on the table when finance ministers meet in Ghent this coming weekend, when they will also debate other aspects of Europe’s competitiveness challenges.

“If the development of European capital markets is not addressed urgently, Europe is at risk of falling behind globally in terms of competitiveness, growth and prosperity of its citizens,” warned the paper, which also called for more integrated market infrastructures and greater powers and more independence for the European Securities and Markets Authority,

FRANCO-GERMAN CMU DRIVE

While some of the more radical ideas including the retail bond are being driven more energetically by France, sources say Germany is also a supporter as both countries continue to pool efforts to accelerate hitherto sluggish progress towards CMU. France recently appointed former European Central Bank vice president and Bank of France governor Christian Noyer as head of its CMU Taskforce.

"Both countries worry that CMU is being held back by much less-developed financial centres across Europe and that they can’t wait for the slowest to catch up," one EU official told MNI.

The paper calls for the European Commission to "comprehensively assess all the supply and demand factors holding back the development of the securitisation market in Europe" and to “come forward with corresponding proposals" during the course of its next term from 2024-2029.

Reducing the debt-equity bias in national corporate tax systems and promoting equity financing are also priorities listed in the paper.

MNI Brussels Bureau | david.thomas.ext@marketnews.com
MNI Brussels Bureau | david.thomas.ext@marketnews.com

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