Southeastern and eastern European Countries link their capital markets

Finance ministers and government officials from eight countries: Poland, Slovakia, Hungary, Slovenia, Romania, Bulgaria, North Macedonia and Croatia, have signed a Memorandum of Understanding on the joint development of capital markets, which is a move towards unifying the stock exchanges of these countries. Also on hand for the signing were representatives from the European Bank for Reconstruction and Development.

The Memorandum confirms the common political will and commitment to reforms that will enable a stronger, more efficient and competitive capital market in the countries of Central and Southeastern Europe. The move was prompted by the limited scope of individual countries, weak turnover and the European Union's initiative to create an EU capital market. Croatia's Deputy Prime Minister and Finance Minister Marko Primorac: “We have decided to join forces, through which we will endeavor to harmonize our legislation and market rules, licensing procedures and make it so that access to one of our markets equals access to any one of these markets once the markets are entirely functional. We are convinced that in this way we can stimulate cross-border trade. The European Bank for Reconstruction and Development has held coordination meetings with the signatory countries pertaining to their stock exchanges. The exchanges themselves have already taken a significant step by signing mutual memorandums of understanding.”

“One of the main shortcomings of this region in terms of economic growth is the under-developed capital markets, and this will be especially true in the coming years. Bank financing is obviously still important, but it is not enough. This memorandum is a big thing. This is not just some piece of paper that will enjoy some brief media coverage. Precisely today we discussed which steps are next, and what we will do to ensure that what is written on that piece of paper becomes a reality,” added Slovenian Finance Minister Klemen Boštjančič.

For his part Slovakian Finance Minister Ladislav Kamenicki said that this was vital to ensure cross-border investment: “It is important that our capital markets are connected, so that investors from Slovakia can invest in these eight countries, and these eight countries can invest also in Slovakia. This is really very important.”

The heads of the individual stock exchanges have been discussing the issue for more than a year now, and have decided that the headquarters of their joint company will be in Croatia. Interestingly, in the first half of this year the Zagreb Stock Exchange saw a 90% growth in turnover when compared to the first six months of 2024.

Source: HRT