BRUSSELS The European Union will focus on infrastructure, green and risk finance to boost funding for the economy, a European Commission vice president said on Tuesday, noting Britain's departure could deprive the EU of its largest financial center.
The commission launched a plan in 2015 to create a capital market union (CMU) by 2019 to smooth the movement of capital across national borders and reduce the EU economy's reliance on banks for loans.
The plan has so far made little headway and was further weakened by Brexit, potentially making it more difficult for the City of London to provide liquidity to the continent.
"The prospect of Europe's largest financial center leaving the single market makes our task more challenging, but all the more important," Commissioner Valdis Dombrovskis told a finance conference in Brussels.
In June, the commission is planning to publish a review of the plan based on feedback collected from the industry.
Dombrovskis listed risk finance, green and infrastructure projects as the sectors where the plan will be expected to deliver results.
He said the commission will continue its overhaul of financial legislation to favor the growth of alternative sources of finance for businesses reducing their over-reliance on banks.
He said regulatory changes may be necessary in the asset management sector to eliminate red-tape obstacles that limit funds' ability to operate across national borders within the EU.
To foster investment in infrastructure, he said the commission will continue lowering capital requirements for companies involved in construction projects.
After having reduced costs for insurers and banks, he said he will propose similar measures for infrastructure corporates.
Dombrovskis also said the commission had set up an expert group on green finance that will make proposals by the end of the year on calls to speed up the flow of capital to sustainable green projects.
(Reporting by Francesco Guarascio Editing by Jeremy Gaunt)