Long-term Financing of the EU economy (Green Paper)
The Commission initiates a discussion on a range of possible measures which could help to promote the long-term financing of investment. These include government-backed savings models, greater focus on the capital markets in relation to financing, more voting rights for long-term shareholders and investment funds aimed at long-term investors.
The fall in investment in the EU is due to the poor economic climate and the erosion of competitiveness; however, it is for the Member States to take action in this regard, not the EU. Government-backed savings models may lead to less rather than more investment, pose the risk of misallocation and have to be borne by the tax payer. Stricter bank regulation ties up capital; however, this is necessary and must not be undermined by the fact that the less tightly regulated insurance companies and pension funds are permitted, for reasons of political expediency, to take on the financing activities of banks. The preferential treatment of long-term shareholders may represent an unlawful restriction on the freedom of movement of capital and thus a breach of EU law.