Insights | EU Insight, 22 November 2019, Brussels

22/11/2019

EU Insight, 22 November 2019, Brussels

PARLIAMENT TO VOTE ON NEW COMMISSION NEXT WEEK

Scrutiny hearings for the incoming European Commission came to an end this week in the European Parliament. The Hungarian nominee, Olivér Várhelyi, was approved as Commissioner-designate for the Neighbourhood and Enlargement portfolio by the Committee on Foreign Affairs after submitting an extra round of written answers. With his approval, the European Parliament is set to vote on the composition of the College of Commissioners as a whole on 27 November. If approved, the new Commission (which will have no UK Commissioner) is expected to take office on 1 December.

NO MEMBER STATE IN EXCESSIVE DEFICIT PROCEDURE FOR THE FIRST TIME SINCE 2002

The Commission issued its opinions on euro area Member States’ 2020 Draft Budgetary Plans (DBP). For the first time since 2002, not a single Member State is in the so-called “excessive deficit procedure.” Nine Member States comply with EU rules, two are broadly compliant and eight are at risk of non-compliance. More broadly, the fiscal stance of the euro area as a whole is neutral (deficit matching GDP growth) but remains insufficiently differentiated. The Commission, therefore, continues to recommend that countries with large budget surpluses start spending more, while countries with deficits should be prepared to make cuts.

EU-SINGAPORE TRADE AGREEMENT ENTERS INTO FORCE

The EU’s trade agreement with Singapore, the EU’s largest trading partner in Southeast Asia with a total bilateral trade in goods of over €53 billion and €51 billion in services, has now entered into force. The deal will remove remaining tariffs on EU products, provide legal protection for 138 European food and drink products and remove regulatory obstacles to trade in key sectors. This includes, for instance, recognising the EU’s safety tests for cars and many electronic appliances and accepting labels that EU companies use for textiles. Economic boosts are also expected to be significant in sectors such as telecommunications, environmental services, engineering, computing and maritime transport.

AGREEMENT ON 2020 EU BUDGET

The Council and the European Parliament agreed on the EU budget for 2020, in an attempt to foster growth and competitiveness, promote climate action and further other EU priorities such as security and management of migration. The total commitment has increased by 1.5% compared to the 2019 budget to EUR 153.6 billion. For unforeseeable needs, the EU also reserves an extra EUR 1.5 billion. The Parliament and the Council now have two weeks to formally approve the agreement. The Council is expected to endorse it on 25 November, whilst the vote in the European Parliament is scheduled for 27 November.

COUNCIL REACHES DEAL ON NON-PERFORMING LOANS DIRECTIVE

Over six months after the agreement on the secondary market enhancing measures, Member States have reached consensus on the most controversial part of the non-performing loans (NPL) Directive, related to the accelerated extrajudicial collateral enforcement (AECE) mechanism. Overall, this agreement would further narrow the scope of application of the AECE mechanism with the exclusion of business credit agreements secured by financial collateral. Moreover, the Council amendments would allow for greater diversion between Member States as well as for an enhanced set of safeguards for the debtors at various stages. Before negotiations begin, the European Parliament still must deliver and endorse its own report.

COMING UP NEXT WEEK:

  • 25 November: Foreign Affairs Council (Development). On the agenda: Global Refugee Forum, Financial architecture for sustainable development, Gender and education.
  • 25-28 November: European Parliament Plenary session. On the agenda: Election of the new European Commission, climate change, EU Budget 2020, situation in Bolivia.
  • 28-29 November: Competitiveness Council. On the agenda: Internal market, Research and space, Sustainable Arctic.

 

Karl Isaksson, Managing Partner Brussels, Kreab