Neena Gill MEP for the West Midlands has welcomed Commissioner Lord Hill’s proposals for the Capital Markets Union announced this week, which aims to break down the barriers to cross-border flows of investment.
Here, Neena comments on what these new proposals mean for West Midlands businesses:
“The CMU proposals are an important step for providing tools for SME growth, and ultimately, jobs for the West Midlands region.
“European funding streams such as Horizon 2020 continue to be overwhelmingly positive, but this type of funding is so competitive, and in the past SMEs have had nowhere else to turn following an unsuccessful application than to banks. These new proposals will change this, minimising our reliance on banks through reducing national fragmentation and ultimately, by diversifying funding sources.
“The EU economy is about the same size as America’s, yet over the pond SMEs raise about five times as much funding from capital markets as in the EU. The CMU will increase access to finance for businesses by strengthening cross border capital flows. No longer will businesses be forced to look beyond the EU and to the US for funding.
However, some eyebrows have been raised about the issue of securitisation and the stability of the new funding proposals. On this, Neena commented:
“We cannot afford to, and won’t make the same mistakes as in the past. Transparency is essential – people need to know exactly what they are investing in and how it will work.
“There is an understandable lack of trust associated with investment funds and we cannot go on like this. I’ve no doubt that the CMU will channel funds towards the real economy which is what our region vitally needs, and will be working to ensure it is transparent and is implemented in a standardised and simple way.
“The UK can’t stand on the side-lines and watch while others set the rules. The CMU is the latest example of why remaining part of the EU is vital for our economy, enabling us to benefit from membership of the single market.”