Vulcan View: The latest EU developments 21 October – 25 October

Michael McGrath, Commissioner-designate for Democracy, Justice, and the Rule of Law

Michael McGrath, Ireland’s commissioner pick, has been appointed Commissioner-designate for Democracy, Justice and the Rule of Law. McGrath is a member of the Irish Fianna Fáil party, belonging to the Renew Europe group in the European Parliament, and a former Minister for Finance.

McGrath, born in Cork in 1976, studied commerce at University College Cork and later qualified as a chartered accountant with KPMG. He has been a member of the Oireachtas (lower house of the Irish Parliament) for the Cork South-Central constituency since 2007. Most recently, he held the positions of Minister for Finance (2022-2024) and Minister for Public Expenditure and Reform (2020-2022).

On receiving the justice and law portfolio Ireland’s Taoiseach, Simon Harris shared:

“This is a strong and influential appointment for Ireland’s Commissioner-designate, Michael McGrath. I have worked closely with President Ursula von der Leyen in recent weeks and today’s announcement is a vote of confidence in Ireland’s candidate.”

Democracy

Michael McGrath will play a key role in protecting the EU’s democracy, by leading work on a new European Democracy Shield and building on both the European Democracy Action Plan and Defence of Democracy package. He will work with other members of the college to step up the fight against foreign information manipulation and interference and coordinate the work on disinformation while also preserving the fairness and integrity of elections. McGrath has also been tasked with protecting the safety of political candidates and elected representatives.

Rule of Law

One of McGrath’s main priorities will be leading the work on consolidating the Rule of Law Paper by reporting on the four pillars related to judicial independence, anti-corruption, media freedom, and other institutional checks and balances. He will add a Single Market dimension to the Rule of Law Report and work closely with the Commissioner for Budget, Anti-Fraud, and Public Administration on developing a clear EU approach to anti-corruption. McGrath will be expected to promote a rule of law culture among European citizens, authorities, and all stakeholders.

Justice

McGrath’s main task will be to contribute to EU competitiveness. He plans to prepare a specific proposal on an EU-wide company legal status – a 28th regime – to help innovative companies grow. In his written answers, McGrath highlighted that this will “offer companies a choice to carry out their activities across the Single Market through an EU-wide legal status instead of having to adopt national legal forms in Member States where they would like to do business.”

He will develop and present the next Consumer Agenda 2025-2030 while also proposing a new Action Plan for consumers in the Single Market. Additionally, McGrath is tasked with developing a Digital Fairness Act to tackle online issues and work closely with Europol and Eurojust to strengthen the European Arrest Warrant.

To conclude, Michael McGrath’s appointment as Commissioner-Designate for Democracy, Justice, and the Rule of Law will ensure greater protection against disinformation, corruption, and strengthen market competitiveness. Tasked with safeguarding democratic integrity and enhancing the rule of law, McGrath’s leadership in this role is set to strengthen EU governance.

Regulating the digital sphere: Ireland’s new Online Safety Code

Ireland’s new media and internet regulator, Coimisiún na Meán, has released its highly anticipated Online Safety Code. The plethora of binding rules will apply to the likes of Facebook, TikTok, and X, among other tech giants, who have headquarters in Ireland. The regulations aim for full compliance with the EU’s audiovisual law. In February, Ireland was fined €2.5 million for the slow transposition of the law.

The principal objective of the new rulebook is to protect social media users from hate speech and damaging content. The new code supplements the EU’s content-moderation rules. Platforms must ban the upload and sharing of harmful content, including self-harm promotion, cyberbullying, eating disorders, and incitement to hatred and terror, to comply with the new regulation. In addition, the new rules require content-sharing platforms to offer features like successful age verification and a structured compliance system.

Protecting children online has become a top priority for European policymakers. Ireland’s new code represents the country’s stringent efforts to protect its youth from harmful digital content and limit minors’ access to adult content. Furthermore, the rules will issue guidance for users on how to report content that is inappropriate and in violation of the code.

These provisions come at an opportune moment with European Commission President Ursula von der Leyen intending to launch a whole Union study into the effects of social media on the well-being of young people. Legislators in the European Parliament’s Internal Market Committee will be focusing on the issue and will produce a report on their findings while governments debate a possible minimum age for social media use and stricter enforcement of blanket blocs on adult content sites. Recent developments in Ireland and the establishment of Coimisiún na Meán show that the country is initiating progress towards creating a safer online environment for minors and towards further alignment with EU priorities. As Ireland is home to the headquarters of multiple big tech firms, it can be viewed as a leader in terms of regulation at a European level. Given this fact, it is vital that Ireland leads by example and provides Coimisiún na Meán with the necessary resources, political backing, and expertise required to fulfil the task at hand.

The code represents a commendable effort to address the circulation of content online that promotes terrorism, racism, and xenophobia. Over the past year, Ireland has witnessed the increasing presence of the far-right on social media platforms. The group’s ability to recruit, disseminate misinformation, and incite hatred and violence has grown due to the failure of platforms, particularly X, to enforce hate speech and misinformation guidelines.

Minister for Media Catherine Martin commented on the new rulebook, stating that it introduces “real accountability for online video-sharing platforms and requires them to take action to protect users”. From 19 November, compliance with the general obligations will be mandatory. Platforms must comply with the remaining rules, requiring internal system adjustments, by 21 July 2025. In addition, platforms that fail to comply with the rules will face fines of up to €20 million or 10 percent of their annual turnover, whichever is greater. However, Coimisiún na Meán will not carry out formal reviews of compliance. Instead, the organisation will vigorously monitor the platforms.

The EU’s innovative approach to supporting Ukraine’s financial stability

As the threat of Russian violence and influence looms menacingly over Europe and aggression continues to escalate in Ukraine, answering how the EU should handle this threat while supporting Ukraine remains obscure. So far, the EU has taken a dual-faceted economic approach, imposing sanctions on Russia and its allies while supporting Ukraine with massive amounts of aid. The EU has provided more than €118 billion to Ukraine since the start of the war. The newest proposal provides exceptional Macro-Financial Assistance (MFA) addressing urgent needs in Ukraine and establishing a Ukraine Loan Cooperation Mechanism offering Ukraine financial support and assistance in repaying the loans provided by its EU and G7 partners.

Macro-Financial Assistance

This loan is the EU’s part of the Extraordinary Revenue Acceleration Loans for Ukraine, a package announced by the G7, in June, providing Ukraine with up to €45 billion in aid. The EU is committing more than €35 billion from its budget in support. The total amount will be distributed in three categories. Approximately 55-60% of this aid will focus on addressing urgent needs including recovery, reconstruction, and self-defence against Russia. About 25% of the aid will be utilised by the Ukraine Facility to support Ukraine’s reconstruction/recovery, economic needs, and EU accession. Lastly, about 15-20% of this aid will be allotted for military support through the European Peace Facility.

To ensure these loans are not economically detrimental to Europe, the EU is leveraging revenues from seized Russian assets to finance them. As part of the sanctions imposed by the EU on Russia following their invasion of Ukraine in 2022, assets of the Central Bank of Russia, valued at approximately €210 billion, have been immobilised and held by financial institutions within the EU. As these assets are the result of implementing restrictive measures, their revenues do not constitute sovereign assets and, therefore, do not have to be made available to the Central Bank of Russia even after immobilisation. The EU has passed measures to use the net profits from these assets, about €4-5 billion per year, for the benefit of Ukraine’s military and reconstruction objectives.

A Ukraine Loan Cooperation Mechanism 

A Ukraine Loan Cooperation Mechanism would appear as a non-repayable financial support assisting Ukraine in repaying loans. The mechanism would work by disbursing payments regularly, ensuring Ukraine can cover the principal and interest payments of specific loans to their EU and G7 partners. Operationalising this mechanism will require adjustments to Council Decision (CFSP)  2024/1470 and Annex XLI to Council Regulation (EU) 833/2014 relating to the allocation of the amount paid by central security depositories. Furthermore, the Ukraine Facility’s payment schedule may also require an amendment to improve the uniformity of payment profiles of all EU budget support to Ukraine. Similar to how the EU is planning to provide aid to Ukraine, the repayment of loans would be supported by the profits stemming from Russia’s immobilised assets in the EU, as well as extraordinary revenues from other relevant jurisdictions.

Conclusion

The coming months will be crucial to demonstrating and ensuring the EU and G7’s collective commitments providing expansive and continued financial support. Enabled by the creation of a new mechanism to support Ukraine’s repayment of loans alongside an immense MFA loan, this will require a coordinated international effort and close cooperation among international partners.  After the European Parliament’s approval of the loan on 22 October, the loan could be released before the end of 2024.

Compliments of Vulcan Consulting – A Member of the EACCNY