A decade ago, Europe set out an ambitious vision: to build a Capital Markets Union (CMU) that would deliver deeper, more diverse, and more integrated capital markets, fostering growth, innovation, and economic resilience. In 2015, EUROCROWD joined forces with leading European associations, including AFME, EBF, BAE, EBAN, EBN, EUROCHAMBRES, and European Issuers, to publish a Joint Declaration, arguing that Europe needed to move beyond bank-centric financing and embrace a broader, more inclusive financial ecosystem. Now, with the publication of the eighth edition of AFME’s CMU Key Performance Indicators Report and the continuity of collaboration between European associations, it is time to take stock: How much of our vision has been realised? Where have we fallen short? And what must come next?
The answer is one of partial success, persistent fragmentation, and a shifting focus. While the CMU has delivered important structural improvements, it has not yet achieved its core political promise of a truly integrated European capital market. The centre of gravity is now moving towards private markets, digital finance, and new initiatives such as the Savings and Investment Union (SIU), which seeks to address many of the CMU’s unresolved challenges.
A Decade of Progress and Persistent Gaps
The CMU has undeniably transformed Europe’s financial landscape, but its achievements are uneven. On the one hand, the past ten years have seen a modernised regulatory framework that has improved transparency, reduced administrative burdens, and opened new channels for financing. Landmark regulations, MiFID II and its reviews, the Prospectus Regulation, the SME Growth Markets regime, ELTIF 2.0, AIFMD updates, and reforms to EuVECA/EuSEF have all contributed to a more robust environment. Importantly for our community, the harmonisation of crowdfunding under the European Crowdfunding Service Providers Regulation (ECSPR) stands as one of the CMU’s clearest success stories.
Private markets have also flourished. As AFME’s KPI report documents, private sources (private credit, private equity, business angels, and equity crowdfunding) grew from 8% to 20% of total capital-market funding over the past decade, reflecting a major structural shift in corporate finance. Corporate bond markets deepened too: record bond issuance has given many corporates an alternative to bank lending in an era of volatile bank balance sheets.
Yet, for all these advances, the CMU has not delivered on its most ambitious promises. Household participation in equity markets remains stubbornly low and conservative savings habits still dominate across many Member States, meaning deposits continue to absorb the majority of household wealth. In macro terms the picture is stark: overall market-based funding has stalled at roughly 3% of EU GDP, compared with about 8% in the US, illustrating that Europe’s capital markets have not materially deepened relative to GDP.
Past IPO activity has been particularly disappointing: equity financing and IPO volumes have fallen, with Europe lagging behind the US, China, and other markets. FESE data also point to a long-term decline in the number of listed companies and to the rise of alternative, often non-traditional—listing routes. The combined effect is fewer public exits, weaker price discovery, and less opportunity for retail and institutional investors to buy into growing European companies. The calls at the recent SME Assembly for a revival of public markets underline the urgency for Europe to act.
Early-Stage Funding: A Blind Spot
Perhaps the most important gap and one closest to EUROCROWD’s heart is early-stage finance. While private markets have grown overall, early-stage investment is uneven and geographically concentrated. EBAN’s statistical work confirms strong angel and early-stage activity in a handful of markets, but substantial parts of Europe remain undercapitalised. But also crowdfunding has only few markets with strong performance. State-level and regionally focused programmes have had impact, but persistent early-stage funding shortfalls remain an obstacle to scaling many promising SMEs across many EU member states.
At the same time, EU programmes such as the European Innovation Council (EIC) and the EIC Fund have doubled down on deep-tech and very high-risk/high-growth opportunities. That is excellent for breakthrough science, but it tends to favour niche, capital-intensive projects over the broad set of SMEs and social enterprises that need patient, modest-sized capital to grow regionally and create inclusive jobs. Eurocrowd supports the EIC’s mission, but we also see a clear mismatch: too much policy attention and budgetary focus on “best-case” unicorn paths, and too little on the long tail of enterprises that form the backbone of local economies. The discussion around the 28th Regime risks to fail the majority of SME if its focus remains overly narrow.
We also want to highlight persistent early-stage funding needs, estimated by EBAN at tens of billions annually. This gap could be addressed by crowdfunding, business angels, and local co-investment schemes, especially if supported coherently under the SIU and in alignment with cohesion policy. Most startups, regardless of their ambitions or technology focus, will not scale or survive long-term. The SIU must therefore provide access to investment for the 20 million-plus European SMEs that form the backbone of our economy, not just those chasing the latest trends favored by venture capital.
Where Digital and Private Innovation Meet Policy
Another defining trend of the last decade is digital innovation in capital markets. The AFME report highlights the EU and Switzerland’s leadership in DLT-based bond issuance, even while the US dominates tokenised funds, stablecoins, and many tokenised private markets. Tokenisation, decentralised trading, and other fintech innovations are blurring the lines between public and private markets—presenting both an opportunity and a regulatory challenge. Europe’s regulatory progress (DLT Pilot learnings, MiCA) matters, but policy must accelerate to avoid fragmentation and ensure innovations scale across borders rather than form isolated national ecosystems.
The securitisation story is also mixed: true-sale securitisation has not returned to its earlier peaks, but Europe leads in Significant Risk Transfer (SRT) instruments that help banks manage capital and risk, yet overall securitisation issuance remains modest relative to other regions.
The SIU: A Pragmatic Pivot For Now
The Commission’s Savings and Investment Union (SIU) agenda represents a pragmatic pivot from grand harmonisation projects towards politically feasible and targeted fixes. Key elements include measures to mobilise retail savings (the proposed Recommendation on Savings and Investment Accounts/SIAs); proposals to tackle withholding-tax frictions; and efforts to strengthen supervisory convergence and digital market infrastructure. These practical interventions are precisely what Europe needs to make capital flow more easily across borders.
Eurocrowd welcomes the SIU’s overall emphasis on retail participation and the mobilisation of household savings, evidence suggests that increasing retail engagement measurably improves market liquidity and creates demand-side support for equity markets. But the SIU now must also explicitly recognise and integrate alternative finance channels such as crowdfunding, co-investment schemes, business angels, and regional match-funding as core tools to deliver on its goals. Institutionl retail instruments, on the otherhand, such as ELTIF 2.0 have shown momentum: the ELTIF market grew substantially in 2025, with 183 funds marketed and €20.5bn in assets under management, yet average fund sizes remain small compared with US peers, underscoring scale and efficiency questions.
Where Europe Should Focus Next
If the SIU is to succeed in creating an investment Union supporting the growth and competitiveness of Europes SMEs, it must do three things well:
- Mobilise retail savings without local protectionism
Policymakers must avoid policies that favour only domestic allocation at the expense of investor returns. Evidence suggests such local-only rules would reduce expected annual returns for retail savers. - Boost early-stage funding with joined-up instruments
The SIU should link national and EU tools such as the EIC, InvestEU, national co-invest funds, tax incentives for angels, and ECSPR-enabled crowdfunding into a coherent “funding escalator” that supports companies from seed to scale. - Make digital and regulatory experiments scale across borders
Tokenisation, DLT bonds, and new market infrastructures must be encouraged to operate cross-border through interoperability and common standards—not limited by a patchwork of national rules.
Hybrid Markets Are the Future — Let’s Build Them Right
Europe’s CMU delivered important foundations: new rules, more private-market activity, the two regulatory milestones ECSPR and MiCA, and advances in sustainable finance. But it failed to deliver a true, integrated public equity culture and the cross-border flows our 2015 Joint Declaration envisaged. The SIU offers a chance to convert structures into functional markets if it combines top-down fixes (tax, supervision, digital infrastructure) with bottom-up mobilisation (crowdfunding, business angels, regional match-funds).
We support the EC’s goals, we applaud the early successes in ELTIF growth and DLT experimentation, and we welcome any policy that mobilises retail savings into safe and productive investment. At the same time, we argue for a more balanced early-stage agenda, one that values regional, impact, and inclusive-growth investments alongside world-beating deep tech. Because Europe’s economy is not built around global corporations and unicorns; the strength of the European economy lies in its SMEs. We need to protect these to sustain our middle class, ensure just wealth distribution, and support our democratic institutions.
The challenge for the next decade is clear: turn the CMU’s structures into everyday participation—for citizens, for SMEs, and for the next generation of European entrepreneurs.
