Smaller EU countries are opposed to what they see as French-led consolidation of power over the bloc’s financial markets.

The European Commission on Wednesday doubled down on its controversial proposal to centralise oversight of EU capital markets, despite staunch opposition from smaller member states to the integration their supervisory authorities.

The EU executive’s Communication on a Savings and Investment Union (SIU) – a rebranding of the long-stalled Capital Markets Union – said a proposal to transfer “certain [supervisory] tasks to the EU level” will now be made in the last three months of this year.

The deadline marks a significant change from an earlier leaked draft of the Communication, which said this proposal would only be made in the third quarter of 2026.

The Communication added that large asset manager groups, trading and post-trading infrastructures, and crypto service providers could be subject to EU oversight. A senior EU official also cited stock exchanges, clearing houses, and central securities depositories as potential examples of EU-supervised trading and post-trading infrastructures.

“We don’t have the luxury of time anymore,” EU Finance Commissioner Maria Albuquerque told reporters. “We need to accelerate, we need to push, to bring everything forward.”

The Commission regards centralising supervision as key to achieving a fully integrated SIU, which aims to channel European citizens’ substantial savings into productive investments.

A “completed” SIU would generate €470 billion in additional private investments per year, according to the Commission: more than half of the €800 billion annual investment boost proposed by former Italian premier Mario Draghi in his report on EU competitiveness.

The Commission’s communication comes ahead of a meeting of EU leaders in Brussels tomorrow, where member states are expected to approve conclusions whose language on supervision has been significantly watered down after strong opposition from smaller EU countries, led by Luxembourg.

Early drafts of the Council conclusions called on member states “to move towards common supervision in key areas such as clearing, securities and crypto-assets and related services”.

The most recent draft, however, removes any specific reference to areas that should be subject to central supervision. Instead, it mentions only in broad terms the need to “ensure convergent supervisory practices”.

Larger EU economies, led by France, have for years urged fellow member states to centralise the supervision of the bloc’s capital markets.

But smaller countries, including Luxembourg, Ireland, and Belgium, are heavily resistant to such a move, which they see as a ruse by Paris to gain control over their own capital markets. The EU’s financial watchdog, ESMA, is based in the French capital.

“Once again, we’re faced with the classic divide between the biggest economies and the group of smaller ones,” said an EU diplomat.

In a veiled nod to these concerns, the Commission’s communication refers to the “efficient” and “harmonised” supervision of capital markets – omitting the word ‘centralised’.

Several diplomats also expressed concerns that this week’s summit discussion could mirror the fractious Council meeting in April last year, where language on supervision was similarly softened following strong resistance from smaller EU countries.

The EU official refused to rule out the possibility that history could repeat itself. “It’s possible that we will have the same debate that we had time and again, but we don’t think this is a good reason not to try again,” they said