SME Financing in a Capital Markets Union (2016:6)

Small and medium-sized enterprises (SMEs) account for close to 70 per cent of employment in the EU. However, as they are still heavily dependent on traditional bank financing, especially in comparison with their US counterparts, the European Commission recently launched a plan for a Capital Markets Union (CMU), aiming to diversify the funding channels available to European SMEs. The authors of this report identify strengths, weaknesses and pitfalls of the Commission’s initiative. They argue that while a CMU may create a more shock-resilient investment system, national differences in legislation and taxation are important impediments for a future CMU that are unlikely to be solved in the short to medium term.

The publication is in English and is a part of the SIEPS project EU and EMU after the economic crisis.

Morgane Fouché is a researcher at the Systemic Risk Centre at the London School of Economics and Political Science (LSE). Katja Neugebauer and Andreas Uthemann are research officers at the Systemic Risk Centre at the LSE.