EconPapers    
Economics at your fingertips  
 

Germany’s brake on European capital-market development

John Grahl and Photis Lysandrou
Additional contact information
Photis Lysandrou: City University of London, UK

European Journal of Economics and Economic Policies: Intervention, 2018, vol. 15, issue 3, 364-381

Abstract: In February 2015, the European Commission published a Green Paper in which it put forward the goal to ‘build a true single market for capital’ for all European Union member states by 2019. The present paper argues that there is no realistic prospect of achieving this goal given that the Green Paper omits any reference to a formidable impediment blocking a European capital-market union: the German government's stance on debt. The inescapable fact is that this government's reluctance to increase the supply of its bonds is depriving the European capital market of one of the essential ingredients necessary to its enlargement on the one hand and to the efficiency of its operation on the other: the former because capital-market enlargement crucially depends on attracting institutional investors who must hold a substantial proportion of their bond portfolios in the form of safe government bonds; the latter because the efficient functioning of the capital markets crucially depends on the efficiency of the money markets where safe government bonds are by far the most important form of collateral.

Keywords: Germany; debt brake; European capital-markets union (search for similar items in EconPapers)
JEL-codes: F36 G15 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/journals/ejeep/15-3/ejeep.2018.03.07.xml (application/pdf)
Restricted access

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:15:y:2018:i:3:p364-381

Access Statistics for this article

European Journal of Economics and Economic Policies: Intervention is currently edited by Torsten Niechoj

More articles in European Journal of Economics and Economic Policies: Intervention from Edward Elgar Publishing
Bibliographic data for series maintained by Phillip Thompson ().

 
Page updated 2025-06-04
Handle: RePEc:elg:ejeepi:v:15:y:2018:i:3:p364-381