The  Commission presented an action plan for a financial system that supports the  EU’s climate and sustainable development agenda. The action plan will establish a classification system to identify sustainable investment, create EU labels for green financial products, and clarify the responsibilities of asset managers and institutional investors for taking sustainability into account. It will also incorporate sustainability in prudential requirements and revise guidelines on non-financial information. The action plan is due to be discussed at a high-level conference on 22 March where the follow-up will be agreed together with stakeholders. 

COMMISSION ENDORSES A PLAN TO COUNTER US IMPORT RESTRICTIONS

The Commission agreed on its response to the import restrictions that the United States (US) plans to impose on steel and aluminium. The EU is committed to defending its rights as a World Trade Organisation (WTO) member through initiating dispute settlement proceedings, countering possible trade diversions by safeguarding measures on third country imports, as well as implementing rebalancing and compensatory EU tariffs on some US products. Nevertheless, the EU still hopes that it will be excluded from the US import restrictions. In the meantime, the Commission prolonged the existing anti-dumping measures on Chinese imports of seamless pipes and tubes of stainless steel for another five years. 

TUSK AND PARLIAMENT OUTLINE POSSIBLE AGREEMENT BETWEEN EU AND UK

European Council President Donald Tusk said he wants an “ambitious and advanced” free trade agreement with the UK. He wants the EU to seek continued security and research cooperation, and ensure that chartered air traffic is not disrupted; however, he rejected UK “cherry picking” of Single Market membership for certain sectors. In tandem with this, the European Parliament will next week be asked to back a draft resolution calling for a “broad, intense and detailed” association agreement with the UK after it exits the EU. The draft was presented this week by the Parliament’s chief Brexit negotiator Guy Verhofstadt and the assembly’s President, Antonio Tajani.

COMMISSION UNVEILS FINTECH ACTION PLAN AND CROWDFUNDING REGULATION

As part of the Capital Markets Union (CMU) package, the Commission has unveiled an action plan on how to harness the opportunities presented by technology-enabled innovation in financial services (FinTech). The proposal aims to make Europe a global hub for FinTech, with EU businesses and investors able to make most of the advantages offered by the Single Market in this fast-moving sector. As a first major deliverable, the Commission is also putting forward rules that will help crowdfunding platforms to grow across the EU’s Single Market – this priority was established because at present many European crowdfunding platforms are still confined by Member State borders. 

COMMISSION ISSUES 2018 EUROPEAN SEMESTER WINTER PACKAGE

The Commission has issued its 2018 European Semester Winter package, consisting of country reports assessing the state of national economies and reforms, including an In-Depth Review of the prevention and correction of macroeconomic imbalances. Each Member State is characterized by its mix of strength and weaknesses, and a number of countries (namely Bulgaria, France, and Portugal, Slovenia) have reduced their macroeconomic imbalances; however, strikingly four countries show imbalances with potential cross-border contagion effects (Italy, Sweden, Spain, and the Netherlands). In addition, the Commission has recommended that Members states enhance reforms to spread growth and achieve economic and social convergence across the EU.

COMING UP NEXT WEEK

·        12 March: Competitiveness Council. On the agenda: Digitalisation of the EU economy, EU industrial policy strategy, undue restrictions in services markets.

·        12 March: Eurogroup. On the agenda: Greece, March Euro Summit preparations, inflation and exchange rate developments.

·        13 March: Economic and Financial Affairs Council. On the agenda: Reducing risks in the banking sector, tax transparency, European semester, G20 meeting preparation.

·        15 March. Employment, Social Policy, Health and Consumer Affairs Council on social policy. On the agenda: The future of social Europe post-2020, gender pay gap, youth guarantee, European Semester 2018, Tripartite Social Summit.

Karl Isaksson, Managing Partner Brussels, Kreab