What do "Spitzenkandidaten" have in mind for the future of the EU banking sector?

ABBL Published 03.05.2019

The German Manfred Weber of the center right EPP, the Dutch Frans Timmernmans of the center left S&D, the German Ska Keller and the Danish Bas Eickhout of the European Green Party, together with the “team of liberal leaders”, among whom the Belgium Guy Verhostadt, are the official candidates running for the next term of the EU’s top job.

Awaiting the upcoming European elections in May 2019, the European political groups have appointed lead candidates for the role of President of the European Commission. Indeed, in line with the more commonly known “Spitzenkandidaten process”, the presidency is expected to be assigned to the candidate of the political group capable of building sufficient parliamentary support.

But how do the lead candidates and their parties see the future of the financial sector and more specifically, the evolution of the Banking Union?

As mentioned in the EPP manifesto, “Let’s open the next chapter for Europe together”, Manfred Weber promises to engage in further developments of the European deposit insurance scheme (EDIS) for banks deposits in the euro area.

We will complete the Banking Union with a European Deposit Insurance Scheme in order to safeguard citizens’ savings and strength-en the tools needed to boost investments during downturns” the manifesto states, stressing the importance of setting up the third pillar of the banking union which aims at a more integrated deposit insurance in the euro area in the case of a bank’s failure.

If Weber’s party allows a certain degree of freedom, Frans Timmermans’ political party seems to have a clear view on the need to enhance regulation in the financial and banking sector.

We will strengthen the rules of the financial and banking sectors because citizens should not bear the cost of mistakes made by banks or see their deposits at risk” says the S&D’ s manifesto.

Together with enhanced financial regulation, the strongly debated issues of sustainability and climate change are also perceived as crucial challenges to be tackled in the coming years. The adoption of a Sustainable Development Pact with social and ecological targets, together with a Just Transition Fund which will help to implement the UN’s Sustainable Development Agenda and Goals, are some of the measures envisaged by the current Commission Vice President’s party to strengthen “a sustainable Europe”.

If Timmermans considers sustainability and climate change as one of the priorities, the two Greens candidates Ska Keller and Bas Eickhout have written the Green New Deal, aiming at channeling further finances in sustainable activities, on their flag.

On banking regulation, “banks need higher capital requirements and banking crucial to the real economy must be separated from trading. Europe needs stronger financial regulation to ensure that the financial sector fully contributes to a resilient and sustainable economy” says the Green manifesto. An even more demanding financial regulation is therefore seen as a prerequisite to ensure that the financial sector will contribute to a resilient and competitive sustainable economy.

Finally, the pool of candidates from the ALDE Group, led by the Belgian Guy Verhofstadt, do not miss the opportunity of the EP elections to include in the manifesto the important role of private actors in developing a stable framework for sustainable investments and finance. Moreover, on the banking side, the candidates form the Alliance of Liberals and Democrats for Europe promise to work for a swift implementation of the banking union in the Eurozone, “based on strengthening the responsibility of owners and creditors of banks rather than increasing the liability of either the taxpayer or competitors for the failure of a bank, and for the reform of the European Stability Mechanism into a true European Monetary Fund based on strict conditions ensuring responsibility and the principle of avoiding moral hazard.”

The candidates from S&D, Greens and ALDE, together with the Party of European Left and the ECR, participated on Tuesday at the conventional Maastricht debate where the aspiring EC Presidents were quizzed on highly debated topics such as digitalization, sustainability and migration. If the absence of Manfred Weber did not pass unnoticed during the debate, another EPP member was taking the floor at the Catholic University of Leuven at the same moment. Indeed, Michel Barnier, the Chief Negotiator of Brexit, delivered a speech which did not only touch upon the state of play of the UK withdrawal from the EU, but had the semblance of a political manifesto. Did Barnier – for over a year credited as a black horse in the race for the Commission Presidency – officially start his campaign?

By Elona Morina, European Affairs, ABBL & ALFI

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