Accountancy Europe, CFA Institute, the European Bank for Reconstruction and Development (EBRD) and the Federation of European Stock Exchanges (FESE) have issued key recommendations for the European Commission and EU member states to harness the potential of capital market integration in post-COVID recovery.
The post-COVID economic recovery must aim for long-term resilience, support a sustainable transition and greener economy, and help smaller businesses get back on track. We believe that these recommendations will take Europe closer to these objectives.
- A revamped CMU which balances between private and public markets is a must.
- The proposed fund for EU IPOs should be pan- European and support both IPOs and secondary issuances, while contributing to relaunching IPOs.
- To re-equitise the economy, a concrete proposal for the fund through public/private partnerships should be drafted.
- The various stimulus packages should include specific bridge financing for viable SMEs/growth companies that were planning IPOs when the Covid crisis hit.
- Measures to address taxation issues:
- Call on the EU and member states to address the existing debt-equity bias on taxation. This invariably will require measures to strengthen equity investments over measures that favour debt.
- A pan-European framework for withholding taxes in order to foster cross-border investment.
- To encourage and facilitate access to growth finance in the aftermath/recovery phase of the Covid crisis, a tax alleviation for companies that go public/do an IPO could be considered.
- For the bridge financing and tax benefit proposals above, emphasis should be given to the E-part of ESG: green investments and fund raisings that are aligned with the green criteria of the EU taxonomy, as well as, the S part of ESG: for companies that have made financial sacrifices in order to protect jobs.
“By joining together with representatives of other key capital market players such as stock exchanges, investment professionals and investors, Accountancy Europe wants to underline the common strength of the multi-faceted capital market ecosystem as a whole. The accountancy profession itself plays a key role in fostering financial market transparency and assurance on reported information, thus enhancing capital markets’ stability and helping to mitigate risks for investors.”
Olivier Boutellis-Taft, Accountancy Europe CEO
The full statement is available here.
Photo credit: EU Parliament