> How would this organization address that fundamental psychological block?

It'll make it easier for investors in one country to invest in businesses in another (assuming both are in EU of course). Larger pool of available investors == larger pool of investors who are fine with higher risks.

Currently, when you raise money, you usually end up with just local investors, because others can't be bothered to having to understand your local laws and regulations, and with everything that comes with that.

Personally, that's what's stopping me too. In one case I still went through and invested in a company in another country, but in most cases I don't even bother reading deeper about the company unless it's in the same country, would have to be an exceptional idea and team for it to be worth it.