Welcome to Better Europe’s weekly update on EU Affairs.
BRITAIN IS BACK… BUT IS BRUSSELS READY?
Exactly ten years after the Brexit referendum that started the velvet divorce between the United Kingdom and “Europe”, as Brits tend to refer to the mainland, Keir Starmer’s decision to step down could throw the UK’s rapprochement with the EU into doubt. Andy Burnham, the outgoing PM’s likely successor, might inherit a country where a majority flirts with the idea rejoining the bloc, but Nigel Farage’s Reform UK is actually leading the polls. If the UK applied tomorrow, accession talks might be easier than for other candidates such as those in the Western Balkan region: legally, the UK is pretty much aligned to the EU’s rulebook, most of which was copy-pasted into national law. But politically, the discussion will be much harder: the Brits would have to ditch their famous opt-out from the Working Time Directive, probably their budget rebate, and, the most visible of all, the British pound. As Michel Barnier put it, no more “custom suits” — forget about just rejoining the internal market for goods, Brussels would want all four freemdoms applied in the UK 2.0. And that includes paying for your fish and chips in euros. Britain might be back in the conversation. But after a decade of “taking back control”, is anyone ready to pay the price?
PARLIAMENT BACKS TRUMPLESS PAYMENTS
The anti-Trump coin. Yes, it might sound simplistic. But it is the argument that has tipped the balance in favour of the digital euro in the Parliament this week: Europe needs to dump its dependence on American card systems and smartphone payments. Every transaction with your smartphone sends a lot of data but also a few cents into the pockets of big U.S. bank and tech firms, as an MEP argued, calling for Trumpless payments instead. When the digital euro project started a few years ago, conspiracy theorists warned for a state-operated crypto-like digital wallet with “programmable money” as Europe still remebered the anti-vax protests during the Covid pandemic. But it’s more than just about the freedom to spend your cash on tobacco and booze, or the kind of transactions you would not want your significant other to be aware of. If well-designed in terms of privacy, digital cash can substitute for physical cash, which is becoming harder to get and to spend. Enter the geopolitical context — never waste a good crisis. Big win for the banks though: the ECB will decide how much cash you can actually hold in your digital wallet. And that “holding limit” will certainly not be high enough to enable one of the major use cases for digital cash, which would see citizens using their bank account for salary payments and run their recurring monthly payments out of the digital euro account instead. So looks like we’ll be free from US tech — not from EU banks.
THE RIS IS RIP
In 2022, the Commission started working on a Retail Investment Package — a series of proposals that this time would really push citizens to invest more in financial markets. But RIP doesn’t sound so well, and the RIS was born: the Retail Investment Strategy. Oxford says that a strategy is a “plan of action designed to achieve a long-term or overall aim”. Well, long-term it certainly turned out to be, as there seems to be no sense of urgency with this strategy”: the agreement adopted this week in the Parliament actually follows more than half a year of “technical” horse-trading after a political agreement at the end of 2025. And most of the measures agreed will not apply until 2029 or 2030, not even in time for the next Parliament election. OK, let’s look at substance then. Does the RIS ban kickbacks paid to financial “advisors”? No, that would kill “independent” advice. Does it tell retail investors how sustainable the products are that they invest in? Not yet, with the ongoing sustainable finance negotiations the Member States prefer to avoid rules that change all the time. Ok then, does does it perhaps create a simple savings and investment account with low fees to make it easier to invest? No, that’s just a recommendation. So, what does the RIS actually do? It mostly tells Member States to keep doing what they’re doing — just a bit better, maybe, someday. A strategy indeed.