Welcome to Better Europe’s weekly update on EU Affairs.
IT’S GAME OVER FOR TEENS ON TIKTOK
The EU’s subsidiarity principle does not mean that policy should be made at the most appropriate level, as many people think. It does mean that Europe should act when its member states cannot address a problem effectively on their own – the burden of proof is on the EU. For kids addicted to social media, we almost seem to be there. Even if addiction is fundamentally a -national- health policy issue, the American drug dealers in this case operate on the internal market. And countries such as France, Denmark, Greece, Austria and Flanders (oh wait) have started to take national measures. So Ursula convened a panel of experts who told her how to protect but also “empower minors in a digital world”. Interestingly, it’s not just a TikTok and Snapchat ban that the EU is considering: app stores, gaming platforms and AI if not used for serious purposes such as homework should also be covered. Von der Leyen is quoted that “When it comes to our kids’ safety online Europe believes in parents, not profits”. Yet, it is usually the parents who push a tablet to their toddler to get some work-at-home done or catch up on their own backlog of doomscrolling. Legislation is coming after the summer, so we know a few lobbyists who will not be hanging around at the beach this month. For the rest of you – enjoy it before it’s game over.
BANKS STEP UP FIGHT AGAINST CAPITAL REQUIREMENTS
Too much capital, it hurts. Not for us, but for banks. Because more capital means more shareholders to share the dividends with. And more happy shareholders means more competitiveness. At least that’s the mantra that the bankers want to make us believe. The Commission is not yet fully convinced – the lack of integration of Europe’s banking market seems to be a much bigger hurdle to the double digit dividends that bank shareholders were once used to. But some concessions have been made compared to drafts from a month ago, each of them a win for lenders but a potential risk for financial stability. First, the output floor, an absolute lower boundary of capital that no bank should fall through, has become a geopolitical competitiveness weapon and the EU is happy to make its seemingly strict 75% floor a bit more flexible. Second, “Pillar 2” top-ups of capital buffers set by supervisors based on individual bank risks won’t count toward leverage ratios. The logic goes that if banks can hold less capital, they can free up cash for lending (or bonuses). And third, the European Banking Authority will get its “competitiveness mandate”, allowing the bank standard setter to weigh it off against consumer protection and financial stability.
COMMISSION SIMPLIFIES THE COMMISSION
Ahead of the next battle on the EU’s long-term budget for 2028-2034, the Commission is bracing itself for potential cuts to the civil service or significant changes to reflect the priorities of the EU’s new Multiannual Financial Framework. So 15 internal working groups have come up with a 400-page shopping list of measures to ensure member states can’t point the finger at the bloated Brussels bureaucracy. After all, with around 30 000 staffers, the executive manages to produce a staggering 178 000 pages of documents in 2025 alone – an increase of 70% since 2017. Most of the recommendations are really internal kitchen. But Commissioner for Budget Piotr Serafin also wants a “stop to start” rule: no new legislative initiative without ditching an old one. Recruitment is getting a shake-up too, with temporary contracts first and a focus on performance over seniority. And 2 500 new staff to handle the growing workload please – although perhaps this point could be traded away if the budget talks move towards a reduced EU budget, with fewer competences, and certainly fewer pages of regulation to be drafted. Simplification, for short. The final report is due in November, just in time to weigh in on the EU’s budget negotiations.