European Commission accelerates move towards Capital Markets Union with new action plan
On Thursday, 24 September 2020, Commission President Ursula Von Der Leyen announced a new ‘action plan’ which will help to bring in a European Union-wide Capital Markets Union (‘CMU’). The modern iteration of this long-anticipated plan was first announced by former president Jean-Claude Juncker in 2014 – although efforts to consolidate the EU’s financial markets can be traced back to the Treaty of Rome, 1957. Once established, the CMU aims to get investment and savings flowing to companies across all Member States, benefitting citizens and investors and the companies themselves – alongside the immediate aim of kick-starting the EU’s post-Covid recovery.
As our readers will surely know, capital markets are an integral component of the modern financial system of the economy of any country or group of countries. Capital markets, often colloquially referred to as stock exchanges, are where companies go to raise capital by dealing in shares, bonds and other such investments. It is where a company that wishes to go public will initially be floated via an initial public offering or IPO. Ireland’s version of these markets, formerly the Irish Stock Exchange, is now known as Euronext Dublin.
But why move now to consolidate capital markets in Europe? Given the size of the EU economy, a massive €18.8 trillion by some estimates, consolidation simply makes sense as a means of helping us to compete with other leading economies like the United States or China. Moreover, the timing of this move by the Commission is also important, as better, unincumbered trade between Member States is something that could help militate against the devastating economic impact of the coronavirus. Indeed, the official European Commission press release notes:
‘Only well-functioning, deep and integrated capital markets can provide the scale of support needed to recover from the crisis and power the transition. The CMU is not a goal in itself, but a fundamental policy to progress on key European priorities.’
As noted above, the CMU will aim to pull the EU out of the economic doldrums it currently finds itself in. Research shows that European SMEs are primarily dependent on traditional bank financing which can of course be daunting or indeed, off limits to some companies who do not have assets against which bank financing can be secured. Therefore, deepening integration between Europe’s capital markets is a good idea as it will provide an alternative means for the raising of capital, all the while helping to deliver on other core objectives like climate action and the digitisation of the EU economy.
Digitisation and climate action – referred to by the Commission as ‘the twin transition’ – are two policy objectives which will require significant investment over the coming years and decades, so much so that public funds will simply not be enough. Private investment via capital markets will be required to fill the shortfall, and again, this is where the Capital Markets Union aims to step in. A prime example of how private investment can help to advance Green objectives can be seen in the explosion of Tesla’s share price whose total market cap has exceeded that of other, far more profitable car producers.
The key objectives of this CMU action plan may be summarised as follows. First, the EU wants to ensure that sufficient capital is available to help SMEs and other companies recover from the pandemic. Secondly, there is a desire to ensure that this recovery fulfils the objectives of the ‘twin transition’ – climate action and the further digitisation of our economy and society. These goals are to be achieved by integrating the EU’s national capital markets into one, consolidated EU capital market. In effect, this will create a single access point, simultaneously simplifying the process of investing for private individuals and funds while also making it much easier for SMEs and other companies to raise capital.
Cross-border parcel delivery services regulations enacted
On Friday, 16 October 2020, Minister for the Environment, Climate and Communications Mr Eamon Ryan enacted SI 433/2020, the European Union (Cross Border Parcel Delivery Services) Regulations 2020. This SI gives effect to Article 8 of Regulation (EU) 2018/644.
The purpose of this Regulation was to ensure transparency of all cross-border parcel delivery tariffs, as noted in Article 5, as a means of further harmonising the internal market of the European Union. Per Article 4, all parcel delivery providers are also required to provide certain information to a designated national regulatory of the Member State in which they are established.
The role of the SI is to lay out penalties for infringements of this Regulation. Regulations 4(1) and 4(2) provide that non-compliance with Articles 4 and 5 respectively shall be an offence, with Reg 4(6) providing that a person guilty of an offence under the Regulation shall be liable on summary conviction to a Class A fine – ie, up to €5,000 euro.
To read SI 433/2020 in full, please click here.
And finally… Batman logo filed as EU trademark
DC Comics Inc, the comic book publisher behind the beloved ‘Batman’ character, surely raised a few eyebrows in Alicante when they decided to file a trademark for the character’s world-famous symbol.
As we know, per s 6 of the 1996 Act in this jurisdiction, trademarks may consist of words, designs, letters, numerals, colours, or even the shape or packaging of goods. They may be as simple as a word or a name – or in this case, a silhouette of a bat against a plain backdrop.
The Nice Agreement – to which Ireland is signed up – provides for the registering of trademarks under certain headings or classes. The batman logo trademark has been applied to all manner of classes, including of course motion picture films but also computer application software, books, athletics bags and backpacks, ceramic goods including coffee cups, clothing, toys and so on.
To view the application in full, click here.
Note: This is intended to be a clear and accurate assessment of recent developments of EU Law. Where any errors are identified, please notify the editor and they will be dealt with accordingly.