The past year has been a mixed bag for the EU’s Capital Markets Union (CMU), “revealing no discernible medium-term advancement”. This was an assessment given by the “Capital Markets Union: Key Performance Indicators” report by the Association for Financial Markets in Europe (AFME), based on a set of metrics devised by the organisation. An annual publication, this year’s edition is the sixth, and happens to coincide with the 30th anniversary of the establishment of the single market.

Unfortunately, progress over the past three decades has been below par. The report describes its data points as “disappointing”, and “showing minimal change in the development of the EU’s capital markets on a global scale”.

Based on the report’s indicator, the international competitiveness of the EU’s capital markets has declined over the year, and is significantly behind the US and UK, especially in terms of access to finance, market liquidity, and digital finance capabilities. Before the creation of the EU, the countries that now make up the member states accounted for five percent of global IPOs. The figure rose to 20 percent after the single market was established, but has stayed at seven percent for the past three years.


EU securitisation issuance by GDP “continues to languish”, experiencing “muted growth” of 0.3 percent of GDP in the first half of 2023, compared to 0.7 percent in the UK and 1.1 percent in the US.

Silver linings

The silver lining can be found in ESG issuance – ESG related bonds raised €206 billion in the first half of 2023, an 18 percent annualised increase from 2022. Green bond issuance increased by 32 percent year-on-year, although this was tempered by a decline in the number of green bonds as a proportion of the overall bond market to 12.7 percent.

In his foreword in the report, AFME CEO Adam Farkas points out that in April this year, EU leaders have “committed to finalising negotiations on any remaining CMU issues before the next EU elections” and that “the European Commission has now formally delivered all the planned legislative and non-legislative measures outlined in its second CMU Action Plan of 2020”. This, he believes, “demonstrates the dedication of the EU Institutions to developing the EU’s capital market capacity”.

Nevertheless, there is work to be done, and it has to be done “at pace”. The report concludes that “there is room for improvement to the CMU if the EU is to achieve its dual goals of a sustainable finance regime and a globally competitive digital services market”.