The European Commission proposed measures on Thursday to make the European Union’s capital markets more competitive by easing cross-border operations and giving broader oversight to the European Securities and Markets Authority.

The 27-nation EU is struggling to compete economically with the United States, China and other rivals, but could boost its competitiveness by bolstering its single market, which functions well for the exchange of goods but less well for services.

Former Italian Prime Minister Enrico Letta, who wrote a report on improving the single market last year, said the biggest overall impact could come from steering the 33 trillion euros ($38.53 trillion) of private savings to the real economy. About a third of it is now held in current accounts.

Letta said the 300 billion euros of family savings heading overseas, principally to the U.S., highlighted the deficiencies of the EU’s fragmented markets, as did the 2024 market capitalisation of respective stock exchanges; in the EU it is 73 per cent of GDP compared with 270 per cent of GDP in the U.S.

The proposals by the European Commission, the EU’s executive body, require the approval of EU governments and the European Parliament. They are intended to ease operations across EU borders with enhanced passporting for regulated markets, as well as central securities depositories.

They would allow pan-European trading venues to streamline corporate structures and licences into a single entity and relax limits on digital ledger technology, which typically refers to blockchain, the technology behind crypto assets.

Oversight of major infrastructure such as trading venues, central counterparties, CSDs and crypto-asset providers would be transferred to the European Securities and Markets Authority (ESMA), which would also have a greater coordinating role for asset management.

France, home to ESMA, has long pushed for it to be given greater power. ESMA head Verena Ross told Reuters in June she would welcome the move, but it faces resistance from some EU member states.

ESMA said it welcomed the proposals. In a statement on its website, it said the package “represents a major step towards deeper and more efficient EU capital markets.”

The plan to transfer supervision of all crypto companies to ESMA follows the rollout of the EU’s new crypto regulations this year which prompted concerns about differences in how national regulators were applying the rules.

Financial regulators in France, Italy and Austria called in September for ESMA to take over supervision of major crypto firms, and France threatened to challenge the “passporting” of licences granted by a different member state, saying it was concerned crypto companies were seeking out jurisdictions with more lenient licensing standards.

Malta’s financial regulator, which came under scrutiny for its process for granting crypto licences this year, has said it opposes giving more crypto supervision power to ESMA.