Summary

At the Lisbon summit in March 2000 EU leaders formulated a challenging objective: that the European Union, over the next decade, should become "the most competitive and dynamic knowledge-based economy in the world." All the EU institutions have underlined that a key element in achieving this goal and sustaining higher productivity and growth, is a more efficient functioning of European financial markets. The Committee of Wise Men, headed by Baron Lamfalussy, has analyzed the obstacles to this, set out priorities for action, and recommended procedural innovations to help make it possible to deliver the Financial Services Action Plan by the target deadline. The Wise Men have in particular stressed the importance of transparency, flexibility and speed in regulation of rapidly changing European securities markets. They suggest more framework legislation, with the task of filling in technical detail and adapting it to change delegated to a committee. They support Parliament's active role both in creating such framework legislation, and in scrutinizing use of the delegated powers.

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What the Wise Men have correctly identified as a hidden potential

The Committee of Wise Men has rightly focused on the huge potential still buried by the incomplete integration of Europe's financial markets. Exploiting this potential should result in microeconomic and macroeconomic benefits to Europe's businesses and consumers. In particular, small and medium sized companies in the EU stand to gain considerably from this integration - and these enterprises have been defined as key elements in the path towards prosperity and employment in the Union. The Committee has called for a 'new Cecchini study' to quantify the economic benefits of financial market integration, and supply benchmarking tools for progress towards it.