Optimal financial structure is a hotly debated topic among economists. So far there is no consensus among scientists that market-based or bank-based financial systems are particularly effective at promoting economic growth and development. Nevertheless, the European Union intends to build the Capital Markets Union in order to foster growth of its member states and make European economy more resiliant to economic crises. The purpose of this paper is to explore the impact of financial structure on economic growth of selected member states of the European Union. By exploring the aforementioned topic it is possible to derive a conclusion about the necessity of enhancing capital markets as a tool for achieving faster economic growth. Special attention has been given to the Croatian financial system and the integration of Croatian capital market with capital markets of other member states of the European Union. Research findings indicate that there is a weak overall connection between economic growth and financial structure, albeit in some countries there is a positive impact of capital markets' activity on economic growth. By observing the connection between the level of gross domestic product per capita and financial structure, one can conclude that bank-based financial systems of observed member states had a slight positive impact on the economic development. Accordingly, the existence of a optimal financial structure for the selected member states of the European Union has not been proven.