Referendum boost as Brussels pledges red tape review

One of the main gripes from the business community and the UK at large about the EU is the amount of red tape in generates. Well that might be about to change.

Jonathan Hill, the British EU commissioner for financial services, has announced a major review of 40 pieces of legislation introduced since the financial crisis. He has also detailed plans for a Credit Market Union that would relax rules which currently pose a barrier to cross-border investment, in an effort to boost non-bank funding of smaller businesses.

"According to the Commission, companies in the EU currently get around 80 per cent of their funding from banks, in contrast to the United States, where the figure is nearer to 20 per cent," says the BBC. "Improving non-bank lending is hoped in particular to help smaller businesses, who have found it hard to get investment from banks since the crisis."

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The Daily Telegraph says in particular the plans could see minimum investment limits of €100,000 in venture capital funds scrapped, opening the door to smaller investors.

A limit on the size of funds that can "passport" across the EU to invest in businesses could also be removed.

Elsewhere, restrictions on how pension and insurance funds can be invested could also be eased. James Walsh from the National Association of Pension Funds told the paper a more "positive approach" would recognise that pension funds are "major institutional investors" that can pump money into in the economy.

Speaking to the Financial Times, Lord Hill was careful not to criticise the work of his predecessors as he stressed the proposals did not mean "the big reforms... the architecture we put in place [post crisis] was wrong". But he added: "When you've done 40 major pieces of legislation in five years... common sense tells you that you are unlikely to have been able to work out all the consequences and interconnections."

The development marks a shift away from "crisis management", added Jyrki Katainen, vice-president of the commission responsible for jobs and investment. "Stability has come back... now we are in the situation where we have to use the European regulatory power to create new markets."

The news will be a welcome boost for the campaign to keep Britain in the EU in the lead up to the upcoming in/out referendum, after a recent poll found a small lead for those in favour of leaving the union.