EU Insight, 20 December 2019, Brussels

FINAL DEAL ON TAXONOMY REACHED AFTER LAST WEEK’S REJECTION

The European Parliament and the Council reached a final agreement on the Taxonomy Regulation. The outcome of negotiations reflects a compromise position more closely aligned with the Parliament’s approach, including a widening of the scope of the Regulation to all products, enhancing disclosure requirements in connection with the Sustainability Related Disclosures Regulation, and introducing a “shades of green approach” with separate categories for Taxonomy-compliant, transition and enabling economic activities. Following the interinstitutional agreement, the compromise text must be adopted by both the Council and the Parliament, as well as undergo translation and lawyer-linguist changes before it is put to EU ministers for final approval.

EUROPEAN SEMESTER AUTUMN PACKAGE COMES WITH SUSTAINABILITY FOCUS

The Commission published the Autumn Package of the European Semester, which places the climate transition at the heart of economic governance. It features, for the first time, a report specifically on the performance of the Single Market. With respect to immediate recommendations and analysis of the past year, the new Commission remains aligned with the previous one. The same 13 countries that were subject to in-depth reviews will come under scrutiny also next year for their macroeconomic imbalances. The Commission will publish country reports on all Member States and in-depth reviews on the 13 countries with macroeconomic imbalances in February 2020.

PRELIMINARY INTERINSTITUTIONAL AGREEMENT ON CROWDFUNDING REGULATION

The European Parliament and the Council of the EU reached a preliminary agreement on the European Crowdfunding Service Providers Regulation. The new rules will remove barriers for crowdfunding platforms to operate cross-border by harmonising the minimum requirements when operating in their home market and other EU countries. They will also increase legal certainty through common investor protection rules. They will cover equity-based and lending-based crowdfunding campaigns of up to EUR 5 million over a 12-month period. The Croatian Presidency will be tasked with finalising technical work on this file before it is submitted to co-legislators for endorsement.

 CO-LEGISLATORS REACH A PROVISIONAL AGREEMENT ON DRINKING WATER DIRECTIVE

The co-legislators agreed on new rules to improve the quality of drinking water and access to it, whilst providing better information to citizens. The new Directive will give the public easy, user-friendly – including online – access to information about the quality and supply of drinking water in their living area, improving public confidence in tap water. In line with the European Green Deal, the new rules will minimize harmful impacts of pollution on both human health and on the environment. The provisional agreement will now have to be formally approved by both the European Parliament and the Council of the EU.

COMMISSION EXPERT GROUP PUTS FORWARD RECOMMENDATIONS TO BOLSTER FINTECH

The Commission Expert Group on Regulatory Obstacles to Financial Innovation published a report proposing recommendations on regulation, innovation and finance. The report puts emphasis on reducing fragmentation and ensuring greater coordination and consistency in regulatory approaches at the EU level. However, it warns of the specific opportunities and risks presented by new technologies such as artificial intelligence and distributed ledger technology and blockchain. To address these issues, the expert group puts forward a total of 30 recommendations, ranging from adapting existing regulation to considering the potential impacts of FinTech from the perspective of financial inclusion and the ethical use of data.

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WE WISH YOU A MERRY CHRISTMAS AND A HAPPY NEW YEAR!

THE EU INSIGHT WILL BE BACK IN 2020.

Karl Isaksson, Managing Partner Brussels, Kreab