Bertelsmann Foundation urges EU to boost IPOs to prevent capital flight

The Bertelsmann Foundation has highlighted the need for the European Union to incentivize initial public offerings (IPOs) to prevent capital flight to the United States. According to a study by the German foundation, European stock markets are currently losing the race for major listings compared to the U.S. market.

This trend impacts the EU's ability to finance its economy and affects corporate capital structures. The foundation notes a “scale gap,” where innovative European startups struggle to access the capital necessary for crucial growth phases, often leading them to seek financing in the United States.

To address this, the foundation suggests that completing the Single Market is essential to reduce capital market fragmentation. Strengthening European stock markets would provide companies with better access to expansion capital and offer citizens a credible alternative to bank deposits for wealth multiplication. The study concludes that Europe's competitiveness and sovereignty depend on its ability to bridge this gap and develop companies regionally.