This weekend, Jean-Claude Juncker confirmed he won’t be standing for a second term as President of the European Commission. The former Prime Minister of Luxembourg, who became president in 2014, says he’ll stand down when his term ends in 2019.
The leadership change will affect all parts of the EC, especially the future of the Digital Single Market (DSM). Juncker is seen as the ‘founding father’ of the DSM, and his departure could slow down the huge amount of work that the EC still has to do.
But what specific effects might this change have? We take a closer look…
Firstly, what is the Digital Single Market?
Announced in 2015, the DSM is a European Commission strategy, which aims to maintain Europe’s position at the forefront of global technology, by making the European Single Market fit for the digital age.
It’s estimated that the success of the DSM could contribute over €400 billion per year to the European economy and create hundreds of thousands of jobs.
What progress has the DSM made since inception?
Since 2015, progress has been made, including improvements to European Copyright Laws; a successful amalgamation of data infrastructures across Europe in cloud-based computing; and more widespread, faster internet connectivity for all Europeans, the cost of which continues to fall.
What positive impact is DSM having on crowd finance?
The successful implementation of the DSM would benefit crowd finance by opening up cross-border activity and access to digital goods and services across Europe by providing more choice and opportunity for those looking to raise and invest capital. Instead of being limited to using platforms in your own country, you could access platforms anywhere in the EU.
Platforms too would enjoy the benefits of smoother VAT integration, and the market for their services would increase. The DSM would also lead to improved competition and, perhaps, consolidation, with businesses able to market to whole EU, rather than looking to the US for growth, as is the current trend.
This chart, based on our monitoring of the sector, shows the European debt market in crowd finance.
We can see that overall growth within the EU has been strong, with the total amount raised increasing each year. We’d expect to see this growth continue if the DSM is correctly implemented and platforms are given license to market themselves in a ‘one-nation’ digital European market.
The future of DSM and the post-Juncker era
As with any expansion, there is potential for confusion as regulation tries to keep pace with growth. But that hasn’t seemed to slow progress so far.
Inevitably, with the departure of Juncker, there is uncertainty about the DSM’s future, however there are no indications the EC is about to shelve the DSM.
As we’ve seen, a change in leadership throughout the world can bring huge change at the policy level. Stakeholders in crowd finance should be looking to Juncker’s successor with optimism, but with some caution.
So, is the DSM here to stay and will European crowd finance continue to grow as a result?
At Crowdsurfer, we believe the progress of the DSM is likely because the revenue opportunity is too great to ignore.
Juncker has two years of his presidency left to run, so we hope key measures will be implemented by the time he departs, and not left on the desk of the new president.
If the DSM is implemented swiftly and correctly, crowd finance could really start to boom across the continent. There's every chance that Juncker’s successor will oversee an exciting era for crowd finance in Europe.