The European Commission should give special attention andpromote the financial mobilisation of equities to fund non-speculative investment by services in small and medium enterprises in the peripheral, isolated and island regions of the European Union, Alfred Sant, Labour Party's head of delegation at the European Parliament, said. 

Many small and medium companies in the European Union and many start-ups will prefer to experiment and innovate with investment and expansion at home before they step outside their border. If they make a success there, moves towards other European markets will be seen as achievable and attainable. Indeed, the cultural factors that define entrepreneurship cannot be ignored.  "Again that had best be done by starting from a national level first," Dr Sant said.

The EP was discussing the ‘Capital Markets Union’ (CMU) launched by the European Commission to help build a true single market for capital across the 28 EU Member States. The Capital Markets Union (CMU), is a key pillar of the Investment Plan aimed to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe’s businesses and long-term projects.

Dr Sant said that Europe needs to develop a better way of mobilizing cash for investment on a national and European basis. The US does this much better than Europe.The claim is that by opening up new ways of mobilizing capital on a European scale, we shall be coming closer to American levels of getting cash to enterprises. But in parallel with this, capital markets need to be promoted on a national basis. Barriers there, regulatory and cultural, need to be removed.

It is necessary to define exactly what makes capital markets in the US so much more dynamic. However, it would be unwise to implement a CMU  simply by transposing the US model to Europe.  The proposals being made by the Commission do not go in this direction.

"The Commission is doing the right thing by emphasizing the digital sector. Here, a new generation of European innovators and entrepreneurs is emerging. They might be more willing to attempt new ways of meeting financial risks and challenges than their predecessors.

"In all this, the step by step approach that is being proposed is praiseworthy.Too many new procedures and regulations to follow would in the end only increase barriers to entry and costs.Let’s create and promote a CMU by using a light touch, one that makes the proper distinction between the need for regulation and over-regulation," said Dr Sant.