Straw calls for capital markets union rethink

Author: Gemma Varriale | Published: 7 Oct 2014
Email a friend

Please enter a maximum of 5 recipients. Use ; to separate more than one email address.

Former UK Labour Home Secretary Jack Straw has called for a rethink of the EU’s capital markets union to change City eurosceptics’ antipathy towards the region’s flagship project.

Straw branded those that believe the UK could easily survive if it left the EU and became what he termed the Norway or Switzerland of Europe as naïve.

"The consequences of a decision by the UK to leave Europe would in my judgement be even more significant than a yes vote would have been in Scotland, and would set off a series of consequences that could undermine the whole European project," he said, speaking at the Association for Financial Markets in Europe’s (Afme) high yield conference in London today.

"One of the things that would change the politics is if there were real flesh put on the bones of what is currently described as a capital markets union," he added.

Capital markets union refers to EU policy-makers’ plans to secure more financing from markets for companies and infrastructure projects to help drive growth in the region.


" While there is a functioning single market in goods inside Europe there is a far from functioning single market in most services "




According to Straw, the union must now become what its supporters want. This, he said, is not a capital markets union as a parallel to the eurozone banking union, but as a properly functioning single market for capital markets, based not on total harmonisation but on the same processes that led to the single market approximation of national regulations in capital markets.

Straw called for the phrase 'single market union’ to be abandoned in favour of a single market in capital markets. That would make City-based eurosceptics more inclined to believe that the EU has something to offer them, as well as manufacturers and those who represent other services, he said.

"While there is a functioning single market in goods inside Europe there is a far from functioning single market in most services in Europe including capital markets," said Straw. "That’s an area of huge deficiency."