Description
This paper explores the slow development of the CMU despite the pressing need for macroeconomic stabilisation in light of COVID-19, Brexit, and ongoing challenges posed by the EU's green transition, digitalisation, and European sovereignty. As financing questions have climbed to the top of the agenda, the EU is renewing efforts to establish a more centralised supervisory framework to enhance the efficiency of its financial markets. Yet, persistent obstacles remain, including the fragmentation of European capital markets, a heavy reliance on bank funding, and political resistance to deeper financial integration and harmonisation. As EU authorities currently push for expanded powers to oversee major stock exchanges and cross-border financial infrastructure, including proposals to strengthen ESMA, the CMU’s stagnation is frequently linked to contemporary challenges. To gain a deeper understanding of the obstacles hindering CMU’s progress, this paper traces its historical roots to contextualise its current stalemate.
Building on accounts that highlight EEC member states' resistance to free capital movement prior to the liberalisation shift in the 1970s and 80s, this study traces the development of the CMU from its first formal mentioning in the 1966 Segré Report. It analyses intra-EEC rivalries, especially the views of European banks, securities firms, insurances, and stock exchanges on the Commission's early initiatives for market-based finance. Apart from these underexplored agents, the UK's role in shaping the regulatory agenda to protect the City will be examined.
Using archival research, BIS and IMF data, and policy documents, this paper explores the agents and strategies that have influenced the CMU as a cornerstone of European economic integration. Situating the CMU's contemporary slow progress within the broader contexts of European financial history and global financial hierarchies, this paper contributes to broader discussions in IPE regarding the evolution of financial systems in light of national and supranational interests.
