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
"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
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
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."