The EU executive will commit to 16 "actions" in total to complete a Capital Markets Union or CMU over the next two years and help the bloc's economy recover from the coronavirus pandemic, the document seen by Reuters showed.

"The Commission will start work on the actions announced in this action plan by launching public consultations on the legal framework for European long-term investment funds and non-bank insolvency shortly," the document said.

"The CMU cannot be built in a single stroke."

The first CMU action plan was launched five years ago but progress has been patchy and a deeper market has become all the more urgent given the need to recapitalise companies hit by the pandemic, and the departure of Britain, the bloc's biggest capital market, from the EU.

The EU is currently assessing how much access it will give to the City of London financial centre in future.

"A CMU is a precondition for a stronger international role of the euro and Europe's open strategic autonomy," the document said.

The 16 actions also include setting up an EU-wide platform to give investors financial information on companies, and assessing if banks that turn down a loan request from small companies should direct them to providers of alternative funding.

The Commission will also propose a common EU-wide system for withholding tax relief at source on cross-border investments, the document showed. It will also seek to harmonise non-bank insolvency law.

The EU executive will also propose the creation of a post-trade consolidated tape of volume and prices data for equity and equity-like financial instruments to help investors find the best deals, the document said.

"It would also improve competition between trading venues," it said.

(Reporting by Huw Jones; Editing by Hugh Lawson and Emelia Sithole-Matarise)

By Huw Jones