17

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Oblasť politiky
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Joint debt instruments: A recurrent proposal to strengthen economic and monetary union

02-04-2020

The idea of issuing joint debt instruments, in particular between euro-area countries, is far from new. It has long been linked in various ways to the Union's financial integration process and in particular to the implementation of economic and monetary union. In the first decade of the euro, the rationale for creating joint bonds was to reduce market fragmentation and thus obtain efficiency gains. Following the financial and sovereign debt crises, further reasons included managing the crises and ...

The idea of issuing joint debt instruments, in particular between euro-area countries, is far from new. It has long been linked in various ways to the Union's financial integration process and in particular to the implementation of economic and monetary union. In the first decade of the euro, the rationale for creating joint bonds was to reduce market fragmentation and thus obtain efficiency gains. Following the financial and sovereign debt crises, further reasons included managing the crises and preventing future sovereign debt crises, reinforcing financial stability in the euro area, facilitating transmission of monetary policy, breaking the sovereign-bank nexus and enhancing the international role of the euro. While joint debt instruments present considerable potential advantages, they also present challenges. These include coordination issues and reduced flexibility for Member States in issuing debt, the potential to undermine fiscal discipline by removing incentives for sound budgetary policies, and the fact that adoption of joint debt instruments would eventually entail the difficult political choice of transferring sovereignty from the national to the EU level. In the context of the current crisis caused by the COVID-19 pandemic, joint debt instruments have once more come to the fore as a potential medium-term solution to help Member States rebuild their economies following the crisis. In Eurogroup and European Council meetings, the solution is not favoured by all Member States and alternative – possibly complementary – approaches have been proposed, such as a credit line through the European Stability Mechanism.

Banking union – Annual report 2019

04-03-2020

The European Parliament's own-initiative report on the banking union in 2019 is due to be debated during the March I plenary part-session. It touches on emerging challenges and actual risks for the European banking sector, stressing its role in funding the real economy, and addresses prudential and resolution rules. The report also restates the need to complete the banking union by establishing a fiscal backstop and a European deposit insurance scheme, and advocates greater active involvement for ...

The European Parliament's own-initiative report on the banking union in 2019 is due to be debated during the March I plenary part-session. It touches on emerging challenges and actual risks for the European banking sector, stressing its role in funding the real economy, and addresses prudential and resolution rules. The report also restates the need to complete the banking union by establishing a fiscal backstop and a European deposit insurance scheme, and advocates greater active involvement for the Parliament in the process.

Public economic support in the EU: State aid and special economic zones

06-02-2020

State aid can be defined as an advantage given by a government that may provide a company with an unfair competitive edge over its commercial rivals. State aid can take several forms, such as public subsidies, tax relief, or the purchasing of goods and services on preferential terms. While the European Union (EU) competition rules consider State aid to be incompatible with the internal market, they allow such aid when it promotes general economic development, for example, when tackling the challenges ...

State aid can be defined as an advantage given by a government that may provide a company with an unfair competitive edge over its commercial rivals. State aid can take several forms, such as public subsidies, tax relief, or the purchasing of goods and services on preferential terms. While the European Union (EU) competition rules consider State aid to be incompatible with the internal market, they allow such aid when it promotes general economic development, for example, when tackling the challenges of global competition, the ongoing financial crisis, the digital revolution, and demographic change. To this end, all EU Member States provide some public economic support, for instance, to the coal mining sector, banks, or the digital economy. To contribute to regional development and to increase competitiveness, some Member States have created special economic zones (SEZs), which offer an attractive combination of tax-and-tariff incentives, streamlined customs procedures, less laws, provision of infrastructure, and creation of business clusters. The European Commission is currently evaluating the State aid modernisation (SAM) package and some of its related laws, as these will expire by the end of 2020. The European Parliament takes a two fold stance towards public economic support in the EU. On the one hand, Parliament stresses that State aid should support ecological transformation and foster the development of services, knowledge, and infrastructure rather than providing support to specific companies. On the other hand, it calls on the Commission to ensure that State aid is reduced in the long term, given its distortive effects on the internal market. While the temporary State aid offered to the financial sector to stabilise the EU financial system might have been necessary, Parliament calls on the Commission to scrutinise and eventually remove this aid. Parliament, inter alia, also calls on the Member States to abandon unfair competition practices based on unjustified tax incentives and to adopt appropriate rules in the Council.

Economic and Budgetary Outlook for the European Union 2020

31-01-2020

This study, the fourth in an annual series, provides an overview of the economic and budgetary situation in the EU and beyond. It summarises the main economic indicators in the EU and euro area and their two-year trends. It explains the annual EU budget, provides an overview of its headings for 2020, and sets out the wider budgetary framework – the multiannual financial framework (MFF) – and its possible evolution in the new decade. A special 'economic focus' puts the spotlight on the international ...

This study, the fourth in an annual series, provides an overview of the economic and budgetary situation in the EU and beyond. It summarises the main economic indicators in the EU and euro area and their two-year trends. It explains the annual EU budget, provides an overview of its headings for 2020, and sets out the wider budgetary framework – the multiannual financial framework (MFF) – and its possible evolution in the new decade. A special 'economic focus' puts the spotlight on the international role of the euro, and on various recent EU-level initiatives in this field.

Hearings of the Commissioners-designate: Valdis Dombrovskis – Vice-President: An Economy that works for people

26-09-2019

This briefing is one in a set looking at the Commissioners-designate and their portfolios as put forward by Commission President-elect Ursula von der Leyen. Each candidate faces a three-hour public hearing, organised by one or more parliamentary committees. After that process, those committees will judge the candidates' suitability for the role based on 'their general competence, European commitment and personal independence', as well as their 'knowledge of their prospective portfolio and their communication ...

This briefing is one in a set looking at the Commissioners-designate and their portfolios as put forward by Commission President-elect Ursula von der Leyen. Each candidate faces a three-hour public hearing, organised by one or more parliamentary committees. After that process, those committees will judge the candidates' suitability for the role based on 'their general competence, European commitment and personal independence', as well as their 'knowledge of their prospective portfolio and their communication skills'. At the end of the hearings process, Parliament votes on the proposed Commission as a bloc, and under the Treaties may only reject the entire College of Commissioners, rather than individual candidates. The Briefing provides an overview of key issues in the portfolio areas, as well as Parliament's activity in the last term in that field. It also includes a brief introduction to the candidate.

Amending the bank resolution framework – BRRD and SRMR

28-06-2019

In May 2019, the European Parliament and the Council adopted the proposals amending the EU legislative framework on bank resolution, consisting of the Banking Recovery and Resolution Directive, and the Single Resolution Mechanism Regulation. Resolution is the restructuring of a bank which is failing or likely to fail, aiming at safeguarding continuity of the bank's critical functions, preserving financial stability and minimising rescue costs to taxpayers. The adopted amendments incorporate into ...

In May 2019, the European Parliament and the Council adopted the proposals amending the EU legislative framework on bank resolution, consisting of the Banking Recovery and Resolution Directive, and the Single Resolution Mechanism Regulation. Resolution is the restructuring of a bank which is failing or likely to fail, aiming at safeguarding continuity of the bank's critical functions, preserving financial stability and minimising rescue costs to taxpayers. The adopted amendments incorporate into EU law the Total Loss-Absorbing Capacity standard, set at international level to improve large financial institutions' capacity to absorb losses and recapitalise in case they are placed in resolution. The new legislative texts were published in the Official Journal on 7 June 2019, and come fully into force on 28 December 2020.

Amending capital requirements: The 'CRD-V package'

15-04-2019

In December 2018, the European Parliament and the Council (the co-legislators) reached a political agreement on the legislative proposals amending the current Capital Requirements Directive and Regulation (the 'CRD-IV package'), which establish the prudential framework for financial institutions operating in the EU. The amendments to the package implement the most recent regulatory standards for banks, set at international level ('Basel III framework'). They also address some regulatory shortcomings ...

In December 2018, the European Parliament and the Council (the co-legislators) reached a political agreement on the legislative proposals amending the current Capital Requirements Directive and Regulation (the 'CRD-IV package'), which establish the prudential framework for financial institutions operating in the EU. The amendments to the package implement the most recent regulatory standards for banks, set at international level ('Basel III framework'). They also address some regulatory shortcomings and aim to contribute to sustainable bank financing of the economy. Parliament is due to vote on adopting the proposals during the April II plenary session.

Minimum loss coverage for non-performing loans

07-03-2019

The recessions resulting from the financial crisis that broke out at the end of the last decade have caused economic difficulties for more and more EU companies and citizens in recent years, leaving them unable to repay their loans. As a result many EU banks have accumulated high volumes of non-performing loans (NPLs) on their balance-sheets. Although it has almost halved since December 2014, the ratio between NPLs and total loans extended by EU banks (the NPL ratio) remains historically high when ...

The recessions resulting from the financial crisis that broke out at the end of the last decade have caused economic difficulties for more and more EU companies and citizens in recent years, leaving them unable to repay their loans. As a result many EU banks have accumulated high volumes of non-performing loans (NPLs) on their balance-sheets. Although it has almost halved since December 2014, the ratio between NPLs and total loans extended by EU banks (the NPL ratio) remains historically high when measured against the ratios of other advanced economies. NPLs represent a risk to banks' balance sheets inasmuch as future losses they might generate are not sufficiently covered by appropriate reserves. To tackle this issue, in March 2018 the Commission adopted a comprehensive package of measures, including a proposal for a regulation amending the Capital Requirements Regulation (CRR) to introduce common minimum loss coverage levels (a 'statutory backstop') for newly originated loans that become non-performing. First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

Setting minimum coverage for potential losses stemming from non-performing loans (NPLs)

06-03-2019

In March 2018, the Commission adopted a package of measures to tackle the risks stemming from the high levels of non-performing loans on EU banks' balance sheets. The package includes a proposal to amend the Capital Requirements Regulation, to introduce common minimum coverage levels acting as a 'statutory prudential backstop' for newly originated loans that become non-performing. Parliament is due to vote on the proposal in March.

In March 2018, the Commission adopted a package of measures to tackle the risks stemming from the high levels of non-performing loans on EU banks' balance sheets. The package includes a proposal to amend the Capital Requirements Regulation, to introduce common minimum coverage levels acting as a 'statutory prudential backstop' for newly originated loans that become non-performing. Parliament is due to vote on the proposal in March.

Review of the European Market Infrastructure Regulation (EMIR): Updated rules on supervision of central counterparties (CCPs)

18-02-2019

The increasing importance of central counterparties (CCPs) and challenges such as the United Kingdom's withdrawal from the EU call for a more comprehensive supervision of CCPs in EU and non-EU countries to secure financial market infrastructure and build confidence. In June 2017, the Commission proposed amendments to Regulation (EU) No 1095/2010 (ESMA – European Securities and Markets Authority) and Regulation (EU) No 648/2012 (EMIR – European Market Infrastructure), to strengthen the regulatory ...

The increasing importance of central counterparties (CCPs) and challenges such as the United Kingdom's withdrawal from the EU call for a more comprehensive supervision of CCPs in EU and non-EU countries to secure financial market infrastructure and build confidence. In June 2017, the Commission proposed amendments to Regulation (EU) No 1095/2010 (ESMA – European Securities and Markets Authority) and Regulation (EU) No 648/2012 (EMIR – European Market Infrastructure), to strengthen the regulatory framework: EU CCPs would be supervised by national authorities in agreement with ESMA, and third-country CCPs subject to different requirements depending on whether (or not) they are systemically important. The European Parliament’s Economic and Monetary Affairs Committee (ECON) adopted its report in May 2018, and the Council agreed its position in November. Trilogue negotiations are now under way.

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