A year ago, the legislative machinery of the European Union was in full swing and scrambling to finalize deals to wrap up legislation before the end of the European Parliament’s term. In the meantime, a new cycle has begun. New MEPs, new Commissioners, new priorities. Things seem calmer. At least on the surface…
The Von der Leyen Commission is now preparing new initiatives for the months to come and most of its work happens in the offices of DG FISMA rather than in a flurry of tense interinstitutional negotiations with the European Parliament and the Council. Among the legislative proposals in the making are the transposition of the final part of the Basel 3 prudential rules, a new action plan on the CMU, a number of scheduled reviews ranging from the Payment Accounts Directive to MiFID or the Mortgage credit directive, VAT rules on financial services, sustainable finance, digital aspects of finance or anti money-laundering rules. And there is the preparatory work in view of third country equivalence decisions once the UK will have let the European Union and its internal market.
In the (temporary) absence of new legislative proposals, things are still far from calm. The EU institutions are dealing with a handful of leftovers from the previous mandate. One example is the CCP recovery and resolution proposal. Interinstitutional negotiations should start very shortly and an agreement is expected in the months to come. Similarly, on the NPLs Secondary Markets Directive negotiations between the EU institution are expected to start in March and to be concluded under the Croatian Presidency. The politically sensitive proposal creating a European Deposit Insurance Scheme (EDIS) has been around for a number of years and is set to progress at a more measured pace. Indeed, work is expected to focus on technical aspects before at some undetermined moment in the future political discussions are to take place.
The absence of new legislative proposals by the Commission also allows the Member States to focus on Council internal and more forward-looking matters. The agendas of the upcoming ECOFIN meetings are very telling in that sense but not less interesting. A number of topics are worth flagging up as relevant to the Luxembourg banking center. In February Ministers of Finance are scheduled to adopt a revised list of non-cooperative jurisdictions for tax purposes. In March they will discuss the implementation of the action plan on non-performing loans (NPLs) as well as the implementation of the more overarching action plan on the Capital Markets Union. The April ECOFIN meeting will discuss progress and the way forward on the common corporate tax base (CCTB) as well as the implementation of the AML action plan. Ministers will also get a state of play on the issue of stablecoins. In June bank legislation is firmly back on the agenda with the Commission due to present its proposals on the implementation of the latest batch of Basel reforms into EU law. Ministers will also get a progress report on the strengthening of the banking union including the controversial European Deposit Insurance Scheme (EDIS).
The legislative pace is definitely picking up and before long it will be back to the usual drumbeat.
By Antoine Kremer, Head of European Affairs, ABBL & ALFI