The financial system of the EU and the Capital Markets Union

This paper deals first of all with highlighting the structure of the financial sector in the European Union. It provides a quantitative overview of the role of the different financial and non financial sectors in offering capital funds to accomplish the needs of households, companies, governments, etc. The analysis tries to solve questions such as who provides funds, who uses them, in what forms the finance is formalised or through what channels financial resources flow. The second part analyses some important aspects of the implementation of the Capital Markets Union, which will be a key step in completing the EU Single Market. Our paper concludes with stating that the integration of the capital markets will be a strong step in supporting economic growth and competitiveness in the EU in the long run.peer-reviewe

The link Between Stock Exchange Sectors and Indices: Implications During the COVID-19 Pandemic

The paper investigates the impact of the COVID-19 pandemic, using the event study approach for the Bucharest Stock Exchange, by which Bucharest Stock Indices and listed firms grouped by sectors were analyzed. The paper uses three important event days, 20 January 2020, 11 March 2020, and 15 March 2020. The findings demonstrate that initially investors were not concerned about the pandemic, showing that they did not realize the extent of globalization and transmission of events on financial markets. Both after 11 March and after 15 March 2020, stock indices have declined, investors becoming worried about the prospects of their dividends and the stock liquidity. The most affected sectors were those related to metallurgical industry, IT&C. After the lockdown, there was a reversal for some sectors like pharmaceutical and biotechnology, electricity production, transportation and distribution, and IT&C. Understanding the intensity and direction of the link between some sectors and indices may influence investment strategies and help in hedging, especially in times of pandemics

A comparative study on renewable and traditional electricity: The influence of the European Union framework and the impact of COVID-19

By means of the event study approach, we analyse the effect of COVID-19 on listed European renewable and traditional electricity companies, inside and outside the European Union, for the pandemic announcement and lockdowns. We find that the pandemic negatively affected both subsectors of electricity production, but the negative effect was more intense for renewable electricity companies, since they represent a riskier investment. Moreover, this negative effect was larger for European electricity companies than for companies from countries that do not belong to the European Union. Our results show the riskier profile of the clean energy industry together with the importance of a stable and supportive regulatory framework to develop and consolidate renewable energy. Our findings have important implications for policymakers. In addition to the intrinsic risks associated with renewable energy, this type of investment poses policy and regulatory risks, which they should take into account when evaluating future energy policies. Policymakers must be aware of the importance of these specific risks, and seek to respond to investors' expectations about long-term, stable regulations

Does government spending boost economic growth in Europe?

The article aims to analyse the evolution of budgetary expenditures and their relationship with economic growth, especially in the EU countries and three non-EU countries - Switzerland, Norway and Iceland during 1991 - 2012. To test the link between government spending and economic growth the research used the United Nation Classification of the Functions of Government and three econometrical regression methods – ordinary least square, least squares dummy variable and the generalized method of moments. Statistical results for the 10 categories of expenditure have shown that economic affairs, environmental protection, recreation, culture and religion and social protection have a significant impact on economic growth. Also the recent economic crisis and the EU accession influenced the variation of GDP/capita

THE MACRO-REGIONAL FRAMEWORK AND DIVERSITY IN EUROPE

The economic crisis has had serious consequences regarding many aspects of the economic and social live in the European Union, most of all affecting equality, regional convergence and employment. Differences between countries are more and more visible and euro skepticism is at its highest level. The new perspective for the European Union is to close the gaps between regions and also to create better economic cooperation. The proposed Juncker plan will be an important step in revitalizing the European economy by creating new investment projects with a key subject being innovative sectors. Also the new role of macro-regions in European territorial cooperation is very crucial for the future of the EU as a big player on the economic stage. This article aims at highlighting the differences between the European regions (e.g. Baltic Sea Region, Danube Region and Alpine Region) and offers some solutions so that economic cooperation can improve

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Purpose: The authors analyze the impact of COVID-19 on listed European electricity companies and differentiate between renewable and traditional electricity, to show the heterogenous characteristics of electricity subsectors and the differences between renewable and traditional electricity. Design/methodology/approach: Using the event study method, the authors calculate the cumulative average abnormal returns (ARs) before and after the World Health Organization pandemic announcement and the declaration of national lockdowns in Europe. Findings: The results show that while the European electricity sector was overall negatively impacted by the COVID-19 announcement, this impact was larger for renewable companies due to their riskier investment profile. Moreover, after the national lockdowns came into effect, the recovery in the financial markets return was smaller for the latter. Research limitations/implications: There may be variables to be included in the model to analyze possible differences between companies and countries, as well as alternative econometric models. Limited to the data, the authors did not investigate the different impact of the economic policy uncertainty from various countries inside or outside the EU. Practical implications: The results have important implications for both investors and policymakers since the heterogenous characteristics of electricity subsectors. This heterogeneity prompts different investor reactions, which are necessary to know and to understand. Originality/value: As far as the authors know, this is the first study that analyses the effect of COVID-19 in heterogeneity profile of both types of electricity, renewable and traditional. © 2021, Emerald Publishing Limited

Is ESG Relevant to Electricity Companies during Pandemics? A Case Study on European Firms during COVID-19

The electricity sector was negatively impacted by the coronavirus disease (COVID-19), with considerable declines in consumption in the initial phase. Investors were in turmoil, and stock prices for these companies plummeted. The aim of this paper is to demonstrate the significant negative influence of the pandemic on abnormal returns for the electricity sector, specifically for traditional and renewable companies and the influence of ESG scores, using the event study approach and multi-variate regressions. Our results show that the pandemic indeed had a negative impact on the electricity sector, with renewable electricity companies suffering a sharper decline than traditional ones. Moreover, we find that ESG pillar scores affected electricity companies differently and are sector-specific. For renewable electricity companies, the returns were positively influenced by the environmental ESG scores and negatively by governance ESG scores

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