Welcome to Better Europe’s weekly update on EU Affairs.
BRUSSELS PUTS ITS GREEN MONEY WHERE ITS TANKS ARE
The Commission is tearing down bureaucratic barriers to accelerate defence investment across the bloc, with a fresh Omnibus package aimed at strengthening Europe’s military readiness and deterring external threats (notably, a resurgent Russia). Unveiled in Strasbourg on Tuesday, the package — the fifth of its kind — streamlines rules on competition, state aid and mergers to create a more predictable and investment-friendly framework for public and private players. It’s all part of the EU’s plan to foster a joint “industrial and technological defence base,” as laid out in its White Paper on Defence and Preparedness back in March. The Commission also wants to settle a long-standing ESG debate: defence is now officially compatible with sustainability. A clear blacklist of prohibited weapons will replace vague “controversial weapons” references, and InvestEU will be adjusted to welcome viable defence projects, while keeping safeguards in place. The aim is to “unlock capital for security and peace,” reads the Commission’s press release. Because in a world of dwindling natural resources, rising global temperatures and shifting geopolitical tectonics, what could be more sustainable than rearming with eco-friendly weapons?
THE EPP CAN’T LET NGOS GO
Even after the Commission, the EU’s Court of Auditors, and the Parliament itself in May confirmed that no wrongdoing or misuse of funds by NGOs had been identified, the EPP finds it hard to let go of their debunked claims. But the group is also reluctant to be seen holding hands in plenary with the far right in their plea for an inquiry committee. So instead, the group this week managed to get the Parliament’s Conference of Presidents to approve the setup of up a special working group in the Budget Control Committee, focused solely on scrutinizing EU funding for NGOs. Everyone to the left of the EPP, including the S&D, the Left, Greens, and Renew voted against, but this didn’t stop Czech MEP Tomáš Zdechovský, the spokesperson for the Budget Control Committee, to paint themselves as saviours: “unlike the far-right, who talk about accountability but avoid meaningful action, and unlike the left, who do not want any rules for NGOs, the EPP Group has come up with a concrete proposal for the most effective way forward”. The decision in the Conference of Presidents was apparently taken without any evidence of undue EU-financed lobbying, and with it, the EPP continues its crusade of silencing independent voices and NGOs that hold those in power to account.
MORE SECURITISATION, MORE BANK LOANS
Securitisation is back baby! As seen in the Big Short, the chopping-up-and-repackaging technique that accelerated the financial crisis nearly two decades ago was in fact already revived through the introduction of the EU securitisation framework that has applied since 2019. But according to the Commission, the focus on safety and need to fight “the stigma associated with securitisation” meant that the rules agreed back then were too “conservative” and “failed to stimulate market development”. In other words, “excessive regulatory or prudential burden” is holding back the repackaging of loans six years later, hence this week’s Commission proposal as part of their Savings and Investment Union strategy. But wait, wasn’t the plan the make Europe less dependent on bank financing? In theory, allowing banks to repackage their loans to consumers and companies to sell them to other investors, could “free up” funding that can then be re-used to provide more loans. However, even if the Commission frames the package as an opportunity to create more investable securities for European savers, more securitisation will only further entrench the dominant model of bank-based financing by further stimulating this type of financing.