Chapter News

Banking Union and Capital Markets Union; Climate Strategy

Commission reports on progress in risk reduction in the Banking Union, calls for fast progress on Capital Markets Union and adopts climate change strategy​

Banking Union and Capital Markets Union

The Commission adopted today two Communications on the Capital Markets Union and on the Banking Union. Concretely, the Commission took stock of the latest developments as regards risk reduction in the banking sector and progress towards an even more integrated and stable EU financial system, ahead of the December European Council and Euro Summit, where decisions on deepening Europe’s Economic and Monetary Union should be taken.

In its third progress report on the reduction of non-performing loans the Commission highlights that non-performing loans in the European banking sector have declined further, now standing at an EU average of 3.4%. This confirms the overall trend of improvement across the Union in recent years, which has been possible thanks to determined action by Member States and market players, notably in countries with relatively high non-performing loans levels. While this is encouraging, high non-performing loans ratios remain a challenge in some Member States.

In a separate Communication, the Commission also called for renewed political engagement and efforts to complete key building blocks of the Capital Markets Union ahead of the European elections next May. Together with the completion of the Banking Union, this is essential for the development of Economic and Monetary Union and strengthening the international role of the euro.

These include important proposals for the creation of new opportunities across the Single Market for businesses and investors through new EU-wide products and services, through simpler, clearer and more proportionate rules, as well as a more efficient supervision of the financial industry. So far, 10 out of 13 proposals putting in place the building blocks of the Capital Markets Union are still under discussion by the EU co-legislators. Three proposals on sustainable finance and three other proposals that are important for EU financial markets are also still pending.

“A clean planet for all”

The European Commission adopted a strategic long-term vision for a prosperous, modern, competitive and climate neutral economy by 2050 – A Clean Planet for all. The strategy shows how Europe can lead the way to climate neutrality by investing into realistic technological solutions, empowering citizens, and aligning action in key areas such as industrial policy, finance, or research – while ensuring social fairness for a just transition.

The purpose of this long-term strategy is not to set targets, but to create a vision and sense of direction, plan for it, and inspire as well as enable stakeholders, researchers, entrepreneurs and citizens alike to develop new and innovative industries, businesses and associated jobs.

The long-term strategy looks into the portfolio of options available for Member States, business and citizens, and how these can contribute to the modernisation of our economy and improve the quality of life of Europeans. It seeks to ensure that this transition is socially fair and enhances the competitiveness of EU economy and industry on global markets, securing high quality jobs and sustainable growth in Europe, while also helping address other environmental challenges, such as air quality or biodiversity loss.

The road to a climate neutral economy would require joint action in seven strategic areas: energy efficiency; deployment of renewables; clean, safe and connected mobility; competitive industry and circular economy; infrastructure and interconnections; bio-economy and natural carbon sinks; carbon capture and storage to address remaining emissions. Pursuing all these strategic priorities would contribute to making our vision a reality.

2019 Draft Budget

Commissioner for Budget and Human Resources Günther H. Oettinger briefed the College on the state of the negotiations between the European Parliament and the Council about the 2019 Draft Budget, following the inconclusive outcome of the conciliation procedure. The College decided to empower Commissioner Oettinger to present the Commission’s second Draft Budget later this week and, in agreement with the President, to bring the negotiations to a good end on this basis.

Situation in Ukraine

The College also discussed the situation in Ukraine where escalating tensions in the Azov Sea over the past days have led to the seizures of Ukrainian vessels and shots being fired at them by Russia as well as injuries to a number of Ukrainian servicemen. These developments are unacceptable and the College underlined that it expects Russia to immediately release the vessels and their crew and ensure the needed medical assistance to the Ukrainian servicemen.  International law obliges the Russian Federation to ensure unhindered and free passage of all vessels through the Kerch Strait. The College stated that it expects Russia to restore the freedom of passage at the Kerch Strait. The EU does not and will not recognise the illegal annexation of the Crimean peninsula by Russia and condemns its aggression towards Ukraine. High Representative/Vice-President Federica Mogherini has been in touch with several partners since this escalation has started and will continue to engage on this issue in view of a broader international response. The EU’s Political and Security Committee has also met earlier this week to discuss the situation and the next steps.

European Citizens’ Initiative

The European Commission has today decided not to register a European Citizens’ Initiative entitled ‘EU wide referendum whether the European Citizens want the United Kingdom to remain or to leave!’. The Commission found that that the conditions for registration of this initiative were not met as the matter falls outside of the EU’s field of competence. The initiative states that: “All European Citizens should have the possibility to express their political opinion, whether they wish the United Kingdom to stay in the European Union.” The organisers call on the European Commission to “support this public opinion poll giving all European Citizens in all 28 member states, the possibility to express their wish whether the Brexit should happen or not.” Article 50(1) of the Treaty on European Union (TEU) explicitly allows any Member State to withdraw from the Union in accordance with its own constitutional requirements. While the European Commission regrets the decision of the United Kingdom to leave the European Union, it respects the outcome of the referendum.

Composition of the Committee of the European Regions and the European Economic and Social Committee

The European Commission has today made two proposals to change the composition of the European Committee of the Regions and the European Economic and Social Committee. The European Committee of the Regions and the European Economic and Social Committee currently each have 350 seats and their term of office will come to an end on 25 January 2020 and 20 September 2020, respectively. It is, therefore, necessary that the Council adopts a decision on the composition of the two Committees, also as the UK’s withdrawal will result in 24 vacant seats, as of 30 March 2019. The Commission proposed to give Cyprus, Estonia, and Luxembourg an extra seat in both Committees, as these three Member States lost a seat after the previous decision in 2015 on the composition of the Committees, due to Croatia’s accession. The remaining seats would be left vacant, as a reserve for possible future enlargements. This would mean that for the period 2020-2025, both Committees would be composed of 329 members each. It is now for the Council, acting unanimously, to adopt this proposal.

Compliments of the European Commission