October is traditionally the time of the year when the European Commission adopts its yearly work programme (CWP). The 2020 edition is aimed at managing the crisis triggered by Covid-19 and continuing work on its political priorities, including the Green Deal, a Digital Europe, a strong European economy.
Regarding the economy and financial services in general the Commission aims to foster the Economic and Monetary Union. The recently published action plan on the CMU2.0 will be instrumental over the years to come. Concretely, in 2021 the Commission will attempt to boost cross-border investments through the Investment protection and facilitation framework proposal that is scheduled to be published by Q2 2021, the revision of the prudential legislation for insurance companies Solvency II in Q3 2021 and the MiFID/MiFIR financial markets cornerstones in Q4 2021.
The economic repercussions of the COVID 19 health crisis and resulting growing non-performing loans figures are shaping the work programme as well. In order to tackle future bank failures and to complete the Banking Union, the Commission plans to revise the bank crisis management and deposit insurance framework in Q4 2021. Indeed the issue is already raising some concerns in Brussels. The legislative proposals on the Basel III finalization are not included in the work programme though various contacts with the Commission tend to confirm that it is still on track and generally expected for Q1 2021.
The fight against money laundering is still very high on the political agenda of all EU institutions. Unsurprisingly the AML legislative package features prominently in the CWP and is scheduled for adoption in Q1 of 2021.
A sustainable finance strategy is also in the making, although the Commission keeps its cards close to the chest. Not much is being revealed by the work programme except that the EU executive will propose to establish an EU green bond standard by Q2 2021, a previously announced measure.
Unsurprisingly there is not much on digital finance as the Commission very recently adopted it digital finance package. The draft legislation is already on course for adoption most likely sometime next year.
By Antoine Kremer and Sofia Badari