Welcome to Better Europe’s weekly update on EU Affairs.
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We have an internal market in financial services, we have consumers, and we have a lot of EU firms and projects that need financing. And financial education is the silver bullet to let the money roll. Sounds familiar? Yes, it’s been tried before, but unfortunately teaching high school students about compound interest and about mortgage loans hasn’t really clicked. So, this time the Commission is going to do the clicking themselves, creating a network of financial literacy ambassadors. Think of the finfluencers that you have seen on Instagram or TikTok, but without the sales pitch. All joking aside, the fact that this package is not a new law but only a recommendation for Member States, shows how powerless the EU is to address the real problems that stop citizens from investing: if you invest in funds, your return is mostly eaten up by fees for “managers” and it’s a tax nightmare as soon as you invest abroad. Oh, and it’s unclear where your money goes — it might include weapons, the fossil fuel industry or nuclear energy, another mess that the Commission might be proposing to fix later this year when reviewing the Sustainable Finance Disclosure Regulation. Stay tuned and don’t forget to like and subscribe!
COPENHAGEN DEADLOCK
Earlier this week at the informal European Summit in Copenhagen, Europe’s leaders failed to speak with one voice. French President Emmanuel Macron warned that Europe is facing off against Russia. Meanwhile, German Chancellor Friedrich Merz described the situation as a grey zone between war and peace. Discussions on Ukraine revealed the limits of European cohesion: European Council President António Costa attempted to transition from a requirement of unanimous consent to a system of qualified majority voting in order to open negotiations with Kyiv. Hungary’s Viktor Orbán responded bluntly: “No way, no way, no way.” While most leaders were constructive, Belgium raised legal and technical concerns. Ultimately, there was no breakthrough, only an agreement to continue working on the issue. The Commission’s proposed 140 billion euro reconstruction loan for Ukraine received widespread support, yet it fell short of the majority needed for decisive action. Looks like the next formal Council, in three weeks, will be the real test of whether European leaders can move beyond caution and achieve unity on this existential matter.
PARLIAMENT BLOCKS THE DEREGULATION EXPRESS
Negotiations on the controversial Omnibus I package in the Parliament were expected to be finalized this week, but collapsed Tuesday night after only four hours. The first simplification package, which was presented as a means of reducing bureaucracy, quickly turned into an ugly fight over corporate accountability, revealing the fault lines of Ursula von der Leyen’s coalition. Socialists and Green MEPs refused to sign up for a deal that would weaken safeguards for workers, communities, and the environment, forcing the EPP to choose between continuing negotiations with the centre-left coalition supporting von der Leyen, or jump in bed with the far right and scrap liability rules and due diligence requirements altogether. For weeks, rumours in Brussels suggested a breakthrough was imminent, but instead the talks collapsed as the EPP was not prepared to show their cards yet. Up next: two more non-confidence votes in plenary, and continued negotiations to decide the financial destination of the Deregulation Express. Von der Leyen probably has a first class ticket already – she told business leaders earlier this week that “We all agree we need simplification. We all agree we need deregulation”