The way forward for European innovations depends on one unified stock market stock market.
The current fragmentary landscape of national exchange suppresses growth, limits liquidity and will drive out talent and capital. The return loop of financing the project, business activity, building a company, exits and return of capital is broken, due to the lack of solid options, especially through initial public offers, creating a critical bottleneck.
Venture Capital returns have dropped in recent years, threatening the entire ecosystem of the European undertaking. The basic change is vital to revive this innovation engine.
Liquidity – the reason for every healthy financial ecosystem – is serious. Companies remain in the private sphere for a very long time when the western markets of IPO stagnation and capital attract the funds of the project. This liquidity crisis is particularly sharp in Europe, where corporations are traditionally less acquired than their American counterparts. The vast, liquid pan-European stock market is not an strange luxury, but a necessity.
Dissemination of wealth
The unified stock exchange would unlock huge capital reserves, attract experienced analysts and practiced a deeper understanding of technology corporations. 35 different national exchanges and 41 industrial exchanges (Compared to three and 16 USA, respectively) Create an unbalanced system.
Thanks to the relatively small pool of listed corporations, EU suffers from a fragmentary market that has no scale and depth to support high -growing projects. This fragmentation also raises operational ineffectiveness; Inventing costs and reducing accessibility for investors and corporations looking for capital.
National pride, historical inertia and local policy perpetuated this stagnation. The concept of many domestic exchanges is as outdated as domestic airlines in every EU country. These replacements have been susceptible to manipulation and poorly equipped with investors through the complexity of recent technologies, equivalent to software, robotics, cyber security and other latest innovations.
This vision is consistent with Mario Draghi European Commission reportwhich emphasizes the reduction of capital market fragmentation and strengthening European Investment BankThe role in financing startups and scale. These are vital steps to increase European competitiveness.
The necessity of the European stock exchange is moreover strengthened by the nature of recent start-ups. They operate on national borders without any problems; The reality that crushed national exchanges won’t fit.
This without a boundary feature is common in sectors equivalent to riding, e-commerce, social media and streaming of music, in which several global players dominate. This reality allows corporations to use larger capital pools, increasing the intensity of capital, increasing competition and conducting industry consolidation, as evidenced by the food supply sector.
The unified stock market, would higher serve these corporations, ensuring the scale and liquidity needed to compete around the world and enabling European investors to participate in the success of those corporations.
Opening the output line
The list on the liquid stock exchange will provide a clear output path for European entrepreneurs, strengthening the VC class and attracting further investments. Stronger output markets increase liquidity, improving the VC Asset class status as an attractive alternative investment opportunity.
It is vital to preserve “brains and profits” in Europe. The United States, with a highly liquid IPO market and dominant technological giants, have long been the predominant beneficiary of European innovations. The United States has a much more fluid IPO market, and Big Tech has increased the largest profits from the stock market over the past three years. Big Tech also purchased the best technology corporations in Europe. Very few SpotifyBase sales in mergers and acquisitions and go to a dynamic stock market offer.
Europe desperately needs the opportunity for European entrepreneurs to mention in Europe. This option does not exist today.
The US model, in which height is often done through acquisitions, worsens the problem.
The reluctance of traditional European corporations to strive for inorganic growth signifies that the well-functioning pan-European exchange is much more critical. This is the only way to provide European startups with access to capital and liquidity they need to develop.
The expected increase in expenditure on European defense expenses emphasizes the urgency of this problem. Startups and scaling, driven by Venture capital and supported by liquid markets, it is best to prepare to ensure the rapid progress needed in today’s geopolitical environment. Traditional directions of defense, with their slower processes, cannot sustain.
These latest defense corporations also need a number of output options, because the takeover of enormous inclines may not provide the desired financial phrases. This investment, innovation and output cycle are of key importance for the way forward for this sector.
The unified European stock market is each a financial instrument and a strategic imperative. The key is to unlock the full potential of European innovations, maintain talent and ensure competitiveness in the global economy. Time to act is now.