The Netherlands and other countries in the European Union face significant and fundamental challenges: our economy needs to become more innovative, productive, and competitive. Only then can we maintain our prosperity in the future. Currently, too many young, innovative companies are leaving Europe. This is partly because they find it difficult to secure financing outside of banks. While European consumers save a lot, this money is insufficiently invested in European companies. The cabinet wants to reverse this trend. Minister Heinen (Finance) today shared the cabinets commitment to strengthening the capital market union with the House of Representatives, also on behalf of Minister Beljaarts (Economic Affairs). The cabinet is presenting concrete proposals from the Netherlands to strengthen the European economy.

Minister Heinen: „The key to our growth lies in Europe. There is enough capital, but it must be invested. A well-functioning capital market union is crucial for this. This is in the interest of the Dutch economy: businesses and citizens benefit from this.”

Currently, the internal market is fragmented. Each country within the EU has its own capital market with its own rules for investment and trading. This makes it difficult for money to flow from country to country within the EU. Many young, innovative companies are leaving Europe to grow, partly because they find it difficult to secure financing outside of banks. They take their knowledge and innovation with them. This is not good for the Dutch and European economy. The capital is present: European consumers save a lot, but there are too few opportunities to invest this money in European companies. Strengthening the European capital market union is therefore crucial according to the cabinet. The cabinet is therefore focusing on improvement in three areas:

1. Stronger European supervision of the capital market
2. More and diverse capital supply for financing companies
3. More equal rules across the EU for the proper functioning of the internal market

In each of these areas, the cabinet proposes actions. For example, the cabinet advocates strengthening direct European supervision of cross-border activities. This makes the capital market more attractive. Differences in the execution of supervision between EU countries now lead to uncertainty, unnecessary regulatory burden, and additional costs for the financial sector, and thus for citizens and businesses.

Furthermore, the cabinet wants to make more and diverse financing options available for companies, for instance, through increased investments in venture capital for young tech companies by the European Investment Bank (EIB) and strengthening pan-European investment funds such as the European Tech Champions Initiative (ETCI), which the Netherlands also contributes to financially.

The cabinet also wants to make it easier to invest or trade (savings) money in other European countries. Therefore, the cabinet advocates the development of an EU investment account on which countries can offer national tax benefits. This will allow investors to more easily invest in European companies, for example, through investment funds and exchange-traded funds (ETFs).

Finally, the cabinet wants to find solutions in Europe to remove unjustified barriers in legislation and strengthen the internal market. Capital does not always flow to the right place due to differences in rules regarding bankruptcies or annual reporting. The European capital market is therefore fragmented, leading to higher costs for entrepreneurs and investors.