Category Archives: finance

FinTech: more competitive and innovative financial EU market

 

The European Commission today unveiled an Action Plan on how to harness the opportunities presented by technology-enabled innovation in financial services (FinTech). Europe should become 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 also put forward new rules that will help crowdfunding platforms to grow across the EU’s single market.

Today’s Action Plan envisages to enable the financial sector to make use of the rapid advances in new technologies, such as blockchain, artificial intelligence and cloud services. At the same time, it seeks to make markets safer and easier to access for new players. This will benefit consumers, investors, banks and new market players alike. In addition, the Commission proposed a pan-European label for platforms, so that a platform licensed in one country can operate across the EU. The Action Plan is part of the Commission’s efforts to build a Capital Markets Union (CMU) and a true single market for consumer financial services. It is also part of its drive to create a Digital Single Market. The Commission aims to make EU rules more future-oriented and aligned with the rapid advance of technological development.

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EU roadmap for sustainable finance

The European Commission welcomes the final report by its High-Level Expert Group on Sustainable Finance (HLEG), which sets out strategic recommendations for a financial system that supports sustainable investments.

The Commission will now move to finalise its strategy on sustainable finance on the basis of these recommendations. Delivering an EU strategy on sustainable finance is a priority action of the Commission’s Capital Markets Union (CMU) Action Plan, as well as one of the key steps towards implementing the historic Paris Agreement and the EU’s Agenda for sustainable development. To achieve the EU’s 2030 targets agreed in Paris, including a 40% cut in greenhouse gas emissions, we need around €180 billion of additional investments a year. The financial sector has a key role to play in reaching those goals, as large amounts of private capital could be mobilised towards such sustainable investments. The Commission is determined to lead the global work in this area and help sustainability-conscious investors to choose suitable projects and companies.

Estonian European Semester to foster the Economic and Monetary Union

The strength of the EMU depends on the financial discipline. It is very important that the member states follow the rules we have already agreed upon for the EMU. It is also essential to use all of the opportunities afforded by coordination procedures,” said Minister Toomas Tõniste, Finance Minister of Estonia, in Tallinn.

Valdis Dombrovskis, European Commission Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, met with Minister Tõniste. Vice-President Dombrovskis and Minister Tõniste focused on the matters of deepening the Economic and Monetary Union (EMU), a topic that Estonia hopes to achieve good progress in during the Estonian Presidency of the Council of the European Union. They also discussed overall economic developments in the context of European Semester and Estonian performance.

“We should use this window of political and economic opportunity. This is a good moment to put in place the remaining elements of a well-functioning EMU,” said Valdis Dombrovskis at the meeting. “It is better than waiting for a new crisis to complete the work. The European Commission is taking the initiative in this discussion: certain options were outlined in a reflection paper in May; President Juncker elaborated on some of these ideas in his State of the Union speech last month; and we will come with specific proposals on the 6th of December”.

Minister Tõniste stressed that EMU plays an important part in strengthening the European finance sector and in harmonising member states’ economic development.

For economic developments in the context of European Semester and Estonian performance Finance Minister Toomas Tõniste said: “Estonia’s economic growth has gained speed due to the recovery in Europe. I also welcome increased business confidence and the pickup in investments that will allow rewards from the favourable developments in European markets. However, an accelerated growth rate should not lead to excessive increases in government expenditure.”

Vice-President Valdis Dombrovskis added that the Estonian economy is well on track. We see strong economic performance. Both the employment rate and the labour force participation are highest in 20 years. GDP growth is revised up to 4.3% for this year, according to government estimates. The Commission will issue its forecast next month, and we expect these to also point out a strong economic performance. However, in good times it is also important to maintain fiscal discipline in order to ensure stability in a long term”.

Minister Tõniste and Vice-President Dombrovskis discussed how Estonia could hold on to its economic momentum. They also focused on how Estonia could achieve good progress with EMU during the last months of its Presidency. As Banking Union is of the cornerstones of the EMU, Estonia hopes to reach to Council’s general approach on the risk reduction package by the end of the year. This would allow proceeding with the negotiations of the European deposit insurance scheme (EDIS).

EU new venture capital rules

The new rules will help diversify the funding sources available for businesses and long-term projects in Europe“, said Toomas Tõniste, minister for finance of Estonia, which currently holds the Council presidency. “By making it easier for them to raise money on capital markets, the aim is that businesses should not rely exclusively on bank loans.”

The Council adopted new venture capital rules aimed at boosting investment in start-ups and innovation.

The regulation is part of the EU’s plan to develop a fully functioning capital markets union. It will also help boost investment, in line with the EU’s ‘investment plan for Europe’.

The regulation was adopted at a meeting of the Agriculture and Fisheries Council, without discussion.

The European Parliament gave its approval on 14 September 2017. This follows an agreement with Parliament representatives reached on 30 May 2017.

Remarks by Jeroen Dijsselbloem following the Eurogroup meeting

Welcome to this Eurogroup press conference. We had a short meting today in the Eurogroup. First of all, I want to thank the Estonian Presidency of course for their hospitality and for allowing us to be in this very inspiring surroundings.

Let me first make a remark on the ongoing economic recovery. I’m not sure whether we should even talk about recovery anymore. In the Eurozone, growth keeps picking up, it is set to remain robust, it’s broad-based, it’s across all our countries. Of course, risks remain and work needs to be done to deal with those risks, but confidence is ever increasing and I think that’s hugely welcome.

 

We started our first meeting after the summer break with a discussion  on how to make our monetary union more resilient, which is vital for its sound functioning. The discussion took place about what is the responsibility of member states and what is the responsibility of the monetary union or the European Union, and I think reducing vulnerability. There are 3 aspects regarding resilience. First of all, of course, how we can make sure that we are less vulnerable to economic shocks. Secondly, how we can increase the absorption capacity. So this is how when the economic shock occurs, how it is being dealt with, absorbed, by institutions, by markets, by households, by companies. And thirdly, about enabling a faster economic recovery after a shock. And that, of course, is one of the lessons learnt from the crisis. We were much too slow in absorbing the shocks. We weren’t ready and fit to absorb the shocks, neither on the private nor on the public side, and it took a very long time to recover. Certainly, if you compare for example to how the US recovered from the crisis. So the three phases: reducing vulnerability before the shocks, absorption of the shock when it occurs, and having a fast recovery after the shock. Those were the elements discussed.

It is of course an umbrella issue, because when you get into it, it is again about the kind of structural reforms needed at national level, finishing the banking union, completing capital markets union so markets can absorb more shocks, improving our governance and institutional frameworks, both national and European. Many of those topics we will also return to today, tomorrow, in the coming months when we discuss the future of the monetary union.

So we will build on today’s discussion, bringing the topics back on our agenda in the coming weeks, putting it in the work programme of the Eurogroup, and start work this autumn on topics that are right in front of us, like finishing the banking union – the Commission already has proposals on the table -, doing more work on the capital markets union where proposals are on the table, while we discussed the future elements of the monetary union.

Second topic today was the state of play in Greece, the planning for the third review in Greece.

We got a report from the institutions on topics that are being worked on at the moment. Technical teams are at the moment in Athens, fact-finding and preparing the grounds, so that later on the third review can get off to a quick start. The idea is to finish that before the end of the year. More work needs to be done of course on a number of issues some of which were already mentioned today.

A sign that Greece has come a long way is the proposal to abrogate the excessive deficit procedure, which we welcomed today and is expected to be adopted by the Council later this month.

We also addressed ongoing court cases against the previous director of Elstat. Let me underline here again that, across the room in the Eurogroup, great concern was expressed about the ongoing court cases, the effect that it has internationally on the confidence in Greece and the process of modernisation in Greece, including the independence, of course, of Elstat itself. That concern was underlined and stressed. But of course the judicial procedures will go their independent ways.

Eurogroup: focus on Greece and economic resilience

Greece

Greece’s Minister for Finance, Euclid Tsakalotos, and the institutions (the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund) briefed the Eurogroup on the state of play of Greece’s ongoing economic adjustment programme.

They presented the expected timeline of the recently started third review of the programme. Greece will be required to complete some 95 actions, many of which concern the implementation of legislation that was adopted earlier during the programme.

Topics that will be covered in the third review include Greece’s budget for 2018, the review of social benefitslabour market reform, public administration-related matters, implementation of strategy for non-performing loans, energysector reform, and privatisation.

Economic resilience in the EMU

Ministers exchanged views on how to increase economic resilience in the Economic and Monetary Union.

They identified a number of policy areas, where improvements could lead to increased economic resilience. These include the need for the diversification of the economy, the flexibility of labour and product markets, taxation incentives for investment, quality of institutions, and other areas.

This initial discussion will guide the Eurogroup’s more concrete thematic discussions on growth and jobs in the future.

Economic resilience refers to a country’s ability to prevent and address economic shocks. It is particularly important for the euro area, where countries share a single currency and are highly interdependent, and where a lack of economic resilience in one country may rapidly lead to serious consequences in other euro area economies.

Draghi: openess is a key ingredient to raise productivity

ECB’s Mario Draghi was speaking at the annual central bankers’ meeting in Jackson Hole, Wyoming.

Openess is a key ingredient for raising productivity in the global economy. Multilateral cooperation is therefore crucial in responding to concerns about fairness,safety and equality.” Explained the President of the ECB.

The global recovery is improving, but like an increasing number of financial and business leaders, Mr. Draghi warned about demographic challenges to growth.

“The global recovery is firming websiteup,” Draghi said. He noted that in Europe and Japan, “the consolidation of the recovery is at an earlier stage” versus that of the U.S.

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