FOCUSING ON FINANCIAL LITERACY – A STEP TOWARDS SUSTAINABLE FINANCING (INFRASTRUCTURE) FOR SMEs

This paper discusses whether the EU’s current financial services regulatory and supervisory policymaking efforts, absent a holistic strategy on access to financial education and improvements to financial literacy are adequate in their current design and deployment for the average microor small-to-medium-sized enterprise (collectively SMEs). This article assesses the European Commission’s efforts on improving access to financial education and various offerings across the EU-27 as well as the resulting policy options to improve the financial literacy of SMEs, whether as a part of CMU 2.0 or otherwise. This paper equally examines if there is a link between the greater access to financial education by (micro) SMEs could ultimately strengthen the EU’s Capital Markets Union project (CMU) as well as other efforts building upon CMU. This is based on the idea that a well-rounded education that provides basic financial education together with understanding risks of speculative investing and benefits of long-term investing might incentivize an additional flux of investments into European capital markets, including across borders and thus reduce fragmentation – another of CMU’s core aims. This paper aims to provide an introduction to some of the challenges faced in the fragmented approach across the EU to financial education and financial literacy generally and, absent definitive data available concerning SMEs, the respective challenges this poses for CMU and the EU Single Market more generally. Furthermore, this paper provides an overview of the efforts to increase the level of financial * Gordana Golubić, Golubić & Partners Law Firm, Zagreb, Croatia; gordana.golubic@ golubic.net. ** Michael Huertas, Dentons Europe LLP, Frankfurt, Germany; michael.huertas@dentons.com. Intereulaweast, Vol. VIII (1) 2021 92 literacy across the EU-27, while looking at lessons from the United States. This paper concludes with an overview of policy options that might be available to the European Commission, including through the increased use of digitized delivery.