EU Insight, 13 March 2020

In view of the extraordinary situation concerning COVID-19, KREAB Worldwide has implemented contingency measures in all offices to deal with the challenge, recognizing also our responsibility to help diminish the spread of the virus. In our Brussels office we are responding to the pandemic proactively. We have equipped and empowered colleagues to work from home and we are encouraging meetings to take place virtually rather than in person. We are very confident that we will be able to continue to provide an excellent standard of service to all our clients. 

COMMISSION OUTLINES PROPOSALS FOR CORONAVIRUS ECONOMIC RESPONSE

The European Commission outlined today its proposed coordinated economic response to the coronavirus outbreak. This was accompanied by a proposal for Regulation on COVID-19 Response Investment Initiative and a proposal for a Regulation on airport slots. Although the Commission said it would do “whatever is necessary” to support Europeans and the European economy, this mainly relies on Member States’ actions to mitigate the economic impact of the outbreak – which the Commission will support in terms of fiscal and state aid flexibility. These measures will now be discussed by EU Finance Ministers during Monday’s Eurogroup meeting.

INDUSTRIAL STRATEGY SETS FRAMEWORK FOR CREATING EUROPEAN CHAMPIONS

The Commission adopted a new EU Industrial Strategy to help Europe’s industry lead the twin transitions towards climate neutrality and digital leadership. The aim is to drive Europe’s competitiveness and its strategic autonomy. The Strategy comes as Member States, in particular France and Germany, have mounted increasing political pressure on the Commission to revise its policy approach to support European industry. As a part of the Strategy, the Commission also adopted an SME Strategy which aims to support European SMEs through strengthening their capacities to adapt to climate neutrality challenges, and to help them to reap the benefits of digitalisation.

COMMISSION GROUP SUGGESTS TAXONOMY CRITERIA AND ISSUES GUIDE ON GREEN BONDS

The Commission Technical Expert Group (TEG) on Sustainable Finance released its technical report on the EU Taxonomy and the usability guide for the EU Green Bond Standard. The two reports represent the extended ongoing work of the TEG to issue guidance to the Commission on several sustainable finance workstreams. The report on Taxonomy reiterates several key components of the provisional political agreement including transition and enabling activities and the exclusion of fossil fuels. On the Green Bond Standard (GBS), the TEG’s usability guide outlines how the GBS will interact with the Taxonomy. The new Commission Sustainable Finance Strategy is expected in Q3 2020.

“BETTER NO AGREEMENT THAN A BAD AGREEMENT”, PARLIAMENT SAYS ABOUT EU BUDGET

The European Parliament held a plenary debate on the latest failed negotiation of the European Council on the next Multiannual Financial Framework (MFF). The statements from the President of the European Council Charles Michel and Commissioner Janez Lenarčič where rather vague. MEPs, however, held a united front in dismissing the failed first round of MFF negotiations as a necessary outcome of the lack of European leaders’ true ambition for an empowered and efficient EU. “Better no agreement than a bad agreement”, many of them said. Despite the time pressure, Charles Michel did not provide a timeline for the next round of negotiations.

COMMISSION PRESENTS NEW CIRCULAR ECONOMY ACTION PLAN

A new Circular Economy Action Plan presented this week by the Commission aims to revamp the way the EU produces, uses and disposes products and seeks to push the EU’s heavy industries to get to net-zero carbon by 2050. With over 30 proposals, legislative and non-legislative, including new measures and revisions of existing legislation, the Plan covers product areas such as electronics and ICT, textiles, construction, plastics, furniture, waste operation and the automotive sector. The new Plan goes further than the first action plan of 2015, with more focus on sustainable products, services and business models.

COMING UP NEXT WEEK

• 16 March: Eurogroup. On the agenda: Coronavirus economic response, ESM Treaty,
• 17 March: Economic and Financial Affairs Council. On the agenda: Capital markets union, Solvency II, European Semester, International cooperation G20 and IMF.

Karl Isaksson, Managing Partner Brussels, Kreab