Press Statement from Frances Fitzgerald MEP
Thursday 24 September 2020
Frances Fitzgerald, MEP for Dublin and member of the ECON Committee, today (Thursday) welcomed the launch of the European Commission’s new Action Plan to boost Europe’s Capital Markets, pointing to the significant opportunities for Ireland’s financial services industry.
“Ireland’s financial services sector is facing serious challenges with Brexit on one side and the economic impact from COVID-19 on the other,” said Ms. Fitzgerald.
“The launch of the EU’s new Capital Markets Union (CMU) Action Plan is a timely and welcome move that will give Ireland significant opportunities to develop Dublin as a global financial hub.
“The Irish financial services sector has always benefited from an integrated EU single market, particularly through the EU’s passporting regime. Dublin has significant expertise when it comes to securitisation and we have one of the most advanced investment fund industries in Europe. The CMU will give Ireland new opportunities to develop these sectors and to benefit from further integration.
“The CMU will ensure the further development of the EU’s single market for financial services and that Ireland’s financial services sector can reduce its dependency on the City of London.
“The idea of the Capital Markets Union is that we diversify sources of financing for companies away from bank lending. A 2019 report from The Association for Financial Markets in Europe (AFME) demonstrated that European companies continue to rely heavily on bank lending, with 88% of their new funding in 2018 coming from banks and only 12% from capital markets.
“Given that banks are already under severe pressure from COVID-19, it is clear that they will not be able to fulfil all funding needs to our companies. Companies will need stable and diverse funding opportunities as we deal with the economic impact from COVID-19 and Brexit.
“There is no doubt that London remains Europe’s dominant financial services hub. However, it will soon lose the benefits of the EU single market and will not have the full freedom to passport financial services to the bloc.
“While we want to ensure strong trading flows in goods and services between Ireland and the UK into the future, the UK will have effectively gone from an EU partner to a third country competitor. Ireland must maximise its opportunities as a member of the most advanced trading bloc and single market in the world.
“The Capital Markets Union project will be an important opportunity for Ireland’s nominated Commissioner-Designate for financial services, Mairead McGuinness, to pursue in her portfolio,” concluded Ms. Fitzgerald.
ENDS
Notes to the Editor:
· European Commission webpage on CMU Action Plan: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1677
