Response to the long-term financing of the European economy

Our policy recommendations:

• Public funding to trigger private investors to invest in SMEs should adopt a more comprehensive approach to address the failures at every stage of the spectrum, from research to venture capital to listed SMEs. The EU should establish a fund to co‐invest in listed SMEs at the stage of subscription and at later stages to improve liquidity.

• The European Commission should avoid any new policies ‐ such as the creation of an Organised Trading Facility ‐ that would exacerbate the difficulties faced by SMEs when accessing local capital markets by eroding the local ecosystem of intermediaries further.

• The Commission should undertake a policy review to reduce the cost of accessing capital markets and to improve the incentives provided to investors when investing in SMEs.

• Existing taxation policy should be reviewed to remove any disincentives that work against equity markets. Any new tax policies such as the FTT ‐ which would have a significant negative impact on financing via equity markets and SMEs in particular ‐ should be re‐considered.

• Future EU policy should further strengthen investor protection and safeguard investor confidence in markets.