ECONOMICS YEARLY REVIEW

The Capital Markets Union and the elusive goal
of a ‛genuine’ Economic and Monetary Union
Rainer Masera *
ABSTRACT: The objective of a European EMU of stable prices, open markets, shared
prosperity, employment and sustainable growth was defined in a Summit meeting of 1969,
and has been actively pursued as a primary goal of the Union over since. Significant results
have been achieved, but the 5 Presidents’ Report (5PR) of June 2015 frankly admits that a
‛genuine’ EMU remains an unaccomplished endeavour: divergences create fragilities for the
whole Union which must be rapidly corrected. A critical analysis of the results so far
recorded in the euro zone comes also from other recent documents of the ECB and the IMF.
The 5 Presidents indicate a roadmap covering the next decade to ensure a genuine EMU:
they argue that progress must be simultaneously made towards economic, financial, fiscal
and political union. All Unions are mutually interdependent and must develop in parallel.
Financial Union, which comprises the launching and achievement of a Capital Markets
Union (CMU), receives specific attention.
The aim of this paper is to offer a critical assessment of the Report, in the analytical
framework of a system-wide perspective on financial and economic stability offered by the
macro prudential policy approach. Purposely, the quantitative evidence presented to
illustrate the shortcomings of the EMU building process so far comes exclusively from
official documents/papers of the ECB, the EC and the IMF.
The “traverse” to the 4-Union EMU is especially complex partly because it goes beyond
economic analysis and policy. The crucial role of CMU requires clarification, also in terms of
the legal approach to be adopted. More generally, the intertwining of economic policies
and the role of fallacies of composition/division must be analytically developed. The 5PR
* Dean of the School of Business, Università degli Studi Guglielmo Marconi, Rome. E-mail:
r.masera@unimarconi.it. The author is grateful to two anonymous referees for very helpful comments on the
first draft of the paper.
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