Insights | EU Insight 29 October, 2021

29/10/2021

EU Insight 29 October, 2021

Brussels, 29 October 2021

 

NEW BANKING PACKAGE PROPSALS AIM TO STRENGTHEN EU BANKS

The Commission issued a set of three proposals to review the EU banking rules. The package implements a new set of banking rules related to the outstanding Basel III post-crisis regulatory reforms agreed upon in December 2017 and adjusts resolution rules. These reforms aim to restore credibility in prudential standards for credit, operational and market risk, and to strengthen the resilience of the EU banking sector enabling it to better absorb shocks and to keep financing the economy. The proposals include contentious issues such as the output floor calculation method, the treatment of third-country branches, and the approach towards ESG risks. The proposals will now be negotiated in the Parliament and Council.

 

PANDEMIC, RECOVERY AND CLIMATE CHANGE WILL BE THE FOCUS OF DISCUSSION AT G20

The leaders of the 20 largest economies in the world will meet in Rome over the weekend. They will mainly discuss i) the pandemic and evolution of the epidemiological situation; ii) how to continue supporting the global economic recovery; and iii) the issue of climate change. On COVID, leaders will discuss on how to best deliver vaccines and their technology to developing economies. Moreover, discussions will revolve around global recovery and ways to deal with the current energy crisis. Lastly, as G20 economies represent 80% of global emissions, ambitious climate change commitments will be relevant in view of the upcoming COP26 conference.

 

EU ENCOURAGES PARTNERS TO DELIVER ON THE PARIS AGREEMENT

The UN Climate Change Conference (COP26) starts next week, and both EU countries and EU institutions will actively urge all parties to meet their commitments under the Paris Agreement and reduce their greenhouse gas emissions. Developed countries have committed to mobilise a total of $100 billion per year of international climate finance from 2020 until 2025 to help the most vulnerable countries, however, so far there is a shortfall of close to $20 billion. The Commission will also urge developed countries to increase their climate efforts to meet the agreed target, to which the EU contributes over $25 billion and will work to finalise the ‘Paris Rulebook’.

 

RENEWABLES OVERTAKE FOSSIL FUELS AS MAIN SOURCE FOR EU ELECTRICITY PRODUCTION

The European Commission published the State of the Energy Union Report for 2021. The document outlines the five dimensions of the Energy Union and the steps taken by the EU to accelerate decarbonisation, increase energy efficiency and security of energy supply, as well as further integrate the energy market while promoting competitiveness and innovation. The document notes that in 2020, for the first time, renewable electricity accounted for a greater share of the energy mix than fossil-based electricity, but stresses that Member States need to do more if the EU is to become climate neutral by 2050.

 

EU EXPORTS BOOSTED BY STRONGER ENFORCEMENT OF TRADE DEALS AND GLOBAL RULES

The first annual report on implementation and enforcement of EU trade agreements was released by the European Commission. The report outlines four main priorities: i) Making full use of the opportunities provided by EU trade agreements, ii) supporting the uptake of trade agreements by small businesses, iii) addressing trade barriers and iv) enforcing trade commitments through dispute settlement. Full implementation of trade agreements added EUR 5.4 billion to EU exports in 2020. Moreover, the document reports on key achievements by the Commission over the last year such as removing 33 trade barriers and facilitating export of SMEs by launching an Access to Markets online platform.

 

COMING UP NEXT WEEK

  • 30-31 October: G20 Summit, Rome.
  • 1-12 November: UN climate change conference (COP 26), Glasgow, UK

 

Karl Isaksson, Managing Partner Brussels, Kreab

____________________________________________________________________

Kreab • Tel: +32 2 737 6900 • karl.isaksson@kreab.comwww.kreab.com/brussels • Twitter: @KreabEU.

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