Welcome to Better Europe’s weekly update on EU Affairs.
ECB CLIMATE TSAR WARNS FOR FOSSIL FUEL DEPENDENCE
Frank Elderson, the green central banker who joined the ECB’s Executive Board back in 2021, is stepping up his messaging on the price stability risk of fossil fuel dependence. We already knew we were not saving the planet just for the planet, but for the humans living on it. But now the framing is even further away from noble intentions to green our society: in fact, it’s all about saving our economy, as fossil fuel is a geopolitical risk before anything else. Climate campaigners will say there were right all along, but the framing of climate problems in climate terms has been a hard sell over the last years. Elderson suggests that the EU needs to invest 660 billion euros a year in clean investments to effectively cut its reliance on imported fossil fuels and ensure price stability. In fact, with Trump’s genocide threat followed by another TACO this week, stock markets are seeing more volatility than ever, and our delayed switch to home-grown clean energy exposes us unnecessarily —“the choice is clear, if not easy” as Elderson puts it.
MAGYAR TO LEAD MAGYAR
With the expected departure of Viktor Orbán at the Council, the EU is losing one of its most colourful leaders, to say it mildly. But just as moderate forces sighed a relief when Czech Prime Minister Andrej Babiš left in 2021, goodbyes are not forever, and the maverick businessman-turned-politician returned last December, picking up his original role as challenger of the Franco-German entente on geopolitical issues such as Ukraine, migration, and the role of the EU. This Sunday, after 16 years as PM, Orbán looks almost certain to be ousted by his main rival Péter Magyar, who has been a relatively absent EPP MEP for nearly two years as he has spent most of his energy on domestic problems and politics. Meanwhile Orbán is trying to save the furniture with high-profile friends such as US Vice President JD Vance openly supporting a fifth term for the European Council’s most senior leader, having been through twice as many Council meetings as Plenković, Macron, and Sánchez. Vance didn’t mince his words as he accused the EU of “the worst examples of foreign election interference that I have ever seen or ever even read about”, but failed to look in the mirror and see his own intervention in the election campaign. As usual, bring on the popcorn!
FORGET PEPP, HERE COMES EUROPE PENSIONS
How is your PEPP doing today? Trump’s recent mood and price swings are producing more market volatility than most pension plan beneficiaries can handle. Especially if you depend on a private pension for your retirement income or work across borders, EU pensions regulator EIOPA explained to MEPs this week. Except that EIOPA is not really a regulator –pensions are mostly covered by national rules and most EU citizens rely heavily on a ‘first pillar’ state pension, the kind of pension that is paid out of the current state budget rather than individual savings. But budgets are under pressure it’s time we save more for ourselves – enter the PEPP, a Pan-European Personal Pension Product. Unfortunately, with a dozen million euros invested, it is a complete failure in terms of market take-up. Why? A hard-fought consumer protection fee cap of 1% which made it unattractive to offer, says the industry. Unfair competition with national products with a tax advantage, say others. So now the plan is to rebrand the PEPP as Europe Pensions, but also use the name as a ‘EU label of trust’ for national products that meet a quality standard. Europe Pensions would be a huge win-win for the industry: the label will overtake the tiny PEPP market, and also keep the market segmented, with tax advantages only for national products. Tax advantages, that Better Finance research year-on-year shows, are almost entirely eaten up by fund distribution fees.