France, Germany, Italy, the Netherlands, Poland, and Spain have sent a joint letter to the Council of the EU calling for progress towards more centralized supervision of European financial markets and strengthening the role of the European Securities and Markets Authority (ESMA).
The document, signed by the Finance and Economy Ministers of the six countries, proposes a series of reforms within the Markets Integration and Supervision Package (MISP), considered by Brussels as a key piece for building a true European Union of Savings and Investment.
The proposal aims to move towards a more integrated European financial market through reforms in cross-border investment, stock market supervision, cryptocurrency regulation, technological development, strengthening of financial infrastructures, and greater supervisory coordination at the European level.
More power for Brussels in financial supervision
One of the central points of the text is the strengthening of the role of ESMA, the European market supervisor, which would assume direct powers over financial infrastructures considered strategic.
The six countries propose progressively transferring to ESMA the supervision of financial clearing houses (CCPs), central securities depositories (CSDs), or large pan-European financial trading platforms.
The proposal includes a gradual process to avoid regulatory shocks and allow the European supervisor to gain experience and resources before fully assuming new functions.
Nevertheless, the move represents a new step towards European financial centralization, a historically sensitive issue for several member states.
Competing with the United States and China
The ministers argue that more integrated capital markets would allow for the mobilization of more European savings towards EU companies, reduce financial fragmentation, and increase the continent's investment capacity.
"European sovereignty and competitiveness depend decisively on its economic and financial strength," states the joint document to which Demócrata has had access.
The letter insists that Europe needs a true financial union to respond to global challenges and finance strategic priorities such as the energy transition, defense, digitalization, or technological innovation.
Cryptocurrencies and European supervision
Another major focus of the proposal concerns the crypto-asset market.
The six governments propose a dual supervision system in which cryptocurrency platforms considered "significant" would be under the direct control of ESMA, while those of lesser relevance would continue to be supervised by national authorities.
In addition, the European supervisor would have the power to block national licenses if it detects relevant risks to market integrity or investor protection.
Europe wants to accelerate financial tokenization
The letter also advocates for accelerating the development of innovative financial technologies, especially the tokenization of assets and the use of blockchain in financial markets.
The signatory countries support expanding the European pilot regime for DLT technology-based infrastructures and removing its temporary limitations.
Furthermore, they advocate for facilitating the use of regulated digital currencies and MiCA-compliant stablecoins for financial settlements within the EU.
The intention is to prevent Europe from lagging behind the United States or Asia in the development of new digital financial infrastructures.
Tensions over national sovereignty and European control
Despite the integration drive, the document attempts to maintain certain political balances.
The ministers emphasize that cooperation between ESMA and national supervisors must be defined to avoid duplication and preserve local market knowledge.
They also call for strict budgetary control mechanisms over the European supervisor and "reasonable" fees for supervised financial entities.