For two decades, the lack of private investment has been one of Europe’s biggest economic weaknesses, undermining productivity, hampering growth potential, and damaging its competitiveness. Moreover, different financial conditions across the euro-area Member States have contributed to diverging levels of investment and economic growth, while fragmented capital markets have aggravated financial instability by reducing risk-sharing and shock absorption through private equity markets. Many hopes were pinned on Capital Markets Union as a policy to address both Europe’s underinvestment and a redistribution of excessive savings throughout the euro area.

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