Covid-19: How capital markets are key to Europe's recovery

As the European Union faces its worst economic shock since World War II, Patrice Bergé-Vincent, managing director of ICI Global, argues that capital markets could be key to its recovery.

Before Covid-19, the region’s economy already was struggling, with growth of just 0.1 percent in the fourth quarter of 2019. Now, EU policymakers are warning that, unless the pandemic eases rapidly, the European economy could contract by 8 to 12 percent or more. 

How can Europe restore growth? One vital component: a bold and ambitious Capital Markets Union (CMU). With its potential to mobilise EU citizens’ investment in capital markets, the CMU is the key to helping the EU economy emerge more quickly from the pandemic, stronger and positioned to thrive in the future.  

Capital markets are critical to the European Union’s recovery

With capital markets experiencing significant volatility, some will say it’s counterintuitive to focus on fostering robust retail investor participation in them. But restarting the EU economy will be an all-hands-on-deck job. Banks and governments alone can’t finance a strong recovery—especially for the industries and small and mid-size enterprises (SMEs) most affected by the crisis—so policymakers will need to enable capital markets to play a significant role. 

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