The Commission is planning to redraw rules for financial markets in a bid to boost the EU’s global competitiveness.
BRUSSELS — The European Union’s executive arm will propose a sweeping package of reforms in a bid to break down national boundaries and create a deeper EU financial market to rival that of the United States.
Three people briefed on the plan told POLITICO the European Commission will in December propose amending at least 10 financial laws spanning everything from the regulation of investment products and cryptocurrency to the design of the EU’s financial plumbing.
The overarching aim is to make more investment available to Europe’s struggling industry in an effort to keep pace with faster-growing competitors in the U.S. and China.
The U.S. in particular dwarfs the EU in the amount of capital available to smaller companies looking to grow. As a result, successful European startups routinely relocate to the U.S. to access the investment they need.
Brussels desperately wants to halt that trend, and sees the creation of a genuinely open capital market as one of the missing pieces in EU economic integration. But its proposed changes will set the stage for a bitter political fight with the bloc’s governments, with countries particularly divided over the idea of giving the EU central supervisory power of financial markets.
The EU executive presented its plans, currently scheduled for December, in a three-hour closed-door briefing for national and European Parliament officials last Tuesday.
According to multiple officials present, the Commission is planning to publish a package that will amend around 10 pieces of existing legislation, redrawing the rules for financial markets in the bloc and how they are supervised.
Existing laws that will be changed include the EU’s flagship financial market rules, known as MiFID and MiFIR; rules for clearinghouses, known as EMIR; rules for investments, known as AIFMD and the UCITS Directive; rules for central securities depositories, known as CSDR; crypto rules, known as MiCA; and the governing regulation of markets watchdog ESMA.
The Commission is also planning to propose a shake-up of how financial markets firms are supervised — an issue that has been deeply political and largely blocked by national capitals in the past. Most firms are currently supervised at the national level, but the Commission wants to shift more supervision to the EU level under the Paris-based watchdog ESMA.
Discussion on this issue ended in a stalemate during an EU leaders’ summit in spring 2024, with a coalition of small countries, including Luxembourg and Ireland — which fear their financial services firms will relocate to Paris — blocking a French-led effort to commit to more centralized supervision.
France is a major supporter of efforts to centralize supervision, but many small countries are against the plan. Germany’s position is unclear, as it has traditionally been against central supervision, but Chancellor Friedrich Merz and Finance Minister Lars Klingbeil have spoken positively about the idea of a single EU stock exchange in recent weeks. The country is against central supervision of crypto, which features in the Commission’s plans.
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EU will move to take on Wall Street with major financial reform proposals
The Commission is planning to redraw rules for financial markets in a bid to boost the EU’s global competitiveness.
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El IBEX falls after EU postpones countermeasures against US tariffs
The Commission now wants to move supervision of all crypto asset service providers to ESMA. | Vega Alonso/EPA
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October 22, 2025 2:33 pm CET
By Kathryn Carlson
BRUSSELS — The European Union’s executive arm will propose a sweeping package of reforms in a bid to break down national boundaries and create a deeper EU financial market to rival that of the United States.
Three people briefed on the plan told POLITICO the European Commission will in December propose amending at least 10 financial laws spanning everything from the regulation of investment products and cryptocurrency to the design of the EU’s financial plumbing.
The overarching aim is to make more investment available to Europe’s struggling industry in an effort to keep pace with faster-growing competitors in the U.S. and China.
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The U.S. in particular dwarfs the EU in the amount of capital available to smaller companies looking to grow. As a result, successful European startups routinely relocate to the U.S. to access the investment they need.
Brussels desperately wants to halt that trend, and sees the creation of a genuinely open capital market as one of the missing pieces in EU economic integration. But its proposed changes will set the stage for a bitter political fight with the bloc’s governments, with countries particularly divided over the idea of giving the EU central supervisory power of financial markets.
The EU executive presented its plans, currently scheduled for December, in a three-hour closed-door briefing for national and European Parliament officials last Tuesday.
According to multiple officials present, the Commission is planning to publish a package that will amend around 10 pieces of existing legislation, redrawing the rules for financial markets in the bloc and how they are supervised.
Existing laws that will be changed include the EU’s flagship financial market rules, known as MiFID and MiFIR; rules for clearinghouses, known as EMIR; rules for investments, known as AIFMD and the UCITS Directive; rules for central securities depositories, known as CSDR; crypto rules, known as MiCA; and the governing regulation of markets watchdog ESMA.
The Commission is also planning to propose a shake-up of how financial markets firms are supervised — an issue that has been deeply political and largely blocked by national capitals in the past. Most firms are currently supervised at the national level, but the Commission wants to shift more supervision to the EU level under the Paris-based watchdog ESMA.
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Discussion on this issue ended in a stalemate during an EU leaders’ summit in spring 2024, with a coalition of small countries, including Luxembourg and Ireland — which fear their financial services firms will relocate to Paris — blocking a French-led effort to commit to more centralized supervision.
France is a major supporter of efforts to centralize supervision, but many small countries are against the plan. Germany’s position is unclear, as it has traditionally been against central supervision, but Chancellor Friedrich Merz and Finance Minister Lars Klingbeil have spoken positively about the idea of a single EU stock exchange in recent weeks. The country is against central supervision of crypto, which features in the Commission’s plans.
Chancellor Friedrich Merz and Finance Minister Lars Klingbeil have spoken positively about the idea of a single EU stock exchange in recent weeks. | Sean Gallup/Getty Images
The Commission now wants to move supervision of all crypto asset service providers to ESMA. It also wants to shift supervision for big, cross-border stock exchanges, clearinghouses and central securities depositories to the EU central supervisor.
ESMA’s governance and funding model would be reformed to reflect its bigger role. The Commission would introduce an independent executive board, which would be responsible for supervisory decisions, unlike the current setup, where a board made up of national finance watchdogs is the key decision-maker. The proportion of ESMA’s funding coming from supervisory fees paid by industry would increase, while the proportion of funding from national watchdogs could decrease.
The proposal is certain to be politically divisive.
The markets package is expected in December and could be discussed at the EU leaders’ summit in Brussels the same month.