Paper 19

FINALLY MAKING Banking Union and Capital Markets Union a Reality !

Action Plan: The 10 Priorities

Common to all dimensions of Europe’s financial future:

Bring the debate on European Financial Union to the wider public

Diagnosis: The debate on Banking Union and Capital Markets Union

remains confined to a circle of insiders and technocrats. Yet the stability and

liquidity of corporate financing channels are essential to business

development.

Action: Make the need for a European Financial Union the catalyst for a

major public debate, supported by national public authorities and actively

involving the media, universities, think tanks, civil society and political

leaders in its implementation.

On Financing Capacity and Efficiency

1. Create a Major European Stock Exchange (Beyond EU Borders)

   • Diagnosis: European stock markets remain fragmented along national

     lines. Although Euronext’s combined exchanges exceed the London

     Stock Exchange in size, Europe still lacks the critical mass to compete

     with New York.

   • Action: Following the Euronext model, immediately initiate the merger

     of EU stock exchanges to lay the foundations for a unified European

     financial platform capable of integrating other continental players over

     time.

     
     

2. Reduce Reliance on Bank Intermediation in Strategic Sectors

• Diagnosis: Excessive dependence on commercial banks hampers

  innovation in strategic sectors.

• Action: Reduce the share of bank lending in corporate

  financing—particularly in AI, deep tech, defence and

  decarbonisation—by shifting financing on a massive scale towards

  capital markets.

  
  

3. Mobilise Dormant Savings (Livret A and Deposit Accounts) for the Real

   Economy

• Diagnosis: National guaranteed savings products absorb a vast share

  of European wealth at the expense of dynamic investment.

• Action: Drive a shift in investment mindset through a major public

  information campaign and professional training in alternative

  investment products.

  
  

4. Develop Funded Pensions to Complement Unfunded Pay-as-You-Go

   Systems

• Diagnosis: Pension systems still rely overwhelmingly on unfunded

  pay-as-you-go arrangements, leaving them vulnerable to demographic

  change.

• Action: Actively promote and establish supplementary funded pension

  schemes across Europe.

On Governance and Regulatory Authority 

5. Centralise European Financial Supervision 

○ Diagnosis: The fragmentation of regulatory oversight among national authorities creates friction and inefficiency. 

○ Action: Consolidate capital markets supervision under the authority of ESMA and bring the entire banking sector under the ECB’s direct supervision. 

6. Harmonise Taxation of Stock Exchange Transactions 

○ Diagnosis: Divergent national tax regimes impede the smooth flow of cross-border capital. 

○ Action: Establish uniform tax rates on financial transactions and investment income across the EU. 

7. Payment Sovereignty: Create a Pan-European Alternative

○ Diagnosis: Credit and debit card networks and mobile payment solutions are dominated by a US oligopoly (Visa, Mastercard, Apple Pay and Google Pay). 

○ Action: Deploy a pan-European card infrastructure and a unified mobile app for instant payments. 

8. Remove Barriers to Cross-Border Mergers (Banking, Insurance and Asset Management) 

○ Diagnosis: Member States’ economic nationalism prevents the emergence of European financial champions in major countries (DE, IT, FR, ES). 

○ Action: Grant the ECB and European authorities exclusive powers to approve cross-border mergers and acquisitions in the financial sector, overriding vetoes by national governments. Furthermore, the policy of the European Commission’s Directorate-General for Competition (DG COMP) must be revised in light of the need to strengthen European autonomy. 

9. Redirect European Investment Funds Towards the EU Single Market

○ Diagnosis: European capital is financing the US economy on a massive scale rather than supporting growth within the EU. 

○ Action: Establish a strong regulatory and incentive framework requiring European investment funds to reinvest a priority share of their assets within the EU. 

10. Complete the European Deposit Insurance Scheme (EDIS) 

○ Diagnosis: Deposit guarantees remain fragmented at national level, undermining systemic stability in a crisis. 

○ Action: Fully unify bank deposit insurance at EU level to complete Banking Union. 

Springeurop, 15 October 2026. 

Authors : Michel Mikolajczak, François Boels, Patrice Crouan, Marc van der Haegen.