Welcome to Better Europe’s weekly update on EU Affairs.
ASSET MANAGEMENT LOBBY SECURES ANOTHER DECADE OF KICKBACKS
So, we have half a Retail Investment Strategy. This week, Parliament adopted the Regulation part of the Commission’s flagship initiative to ensure ordinary citizens also benefit from European integration when investing in financial markets. But on request of the EFAMA, the asset management industry, MEPs voted down the Directive which would have required fund managers to prove they deliver “value for money”, a watered-down version of a more fundamental ban on the kickbacks that discourage citizens from investing as a large part of their profits goes to “financial advisors” selling them investment products. BETTER FINANCE explained that the “vote delivers the outcome sought by opponents of greater transparency and accountability”: no value for money, no cost scrutiny, nothing on conflicts of interest. Perhaps some MEPs found the compromise too weak, but even watered down the deal beats the status quo according to the NGO. EFAMA explained that the agreement would lead to a compliance burden with because “firms distributing cross-border will face as many de facto regimes as there are supervisors willing to legislate”. OK, but who lobbied for national rules instead of European standards? It’s the old playbook: sabotage the rules, see them fail, then complain that they should be abolished. Or make sure that they do not even enter into force.
COMMISSION REPEALS REGULATION ON BUTTER AND MILK POWDER FOR BULGARIA
The withdrawal of the Green Claims Directive is not the only major cornerstone of the Commission’s Work Programme for 2027; we failed to report last week on the important decision to repeal a regulation from 1991 arranging a one-off delivery of butter and milk powder to Bulgaria. Thanks to Dutch MEP Marieke Ehlers from the Patriots, we stand corrected. She explained in plenary this week that the Commission’s announced deregulation to balance its massive list of 24 new initiatives is pure deception, and that the milk delivery law repeal is showing the Commission’s decisiveness. Instead, the Commission should withdraw the “disastrous Green deal” or the “failing migration pact”, or even better, “simply abolish itself”. The Patriots were also not happy that the programme was presented to Parliament on Wednesday by Commissioner Šefčovič, suggesting President von der Leyen had better things to do; they wanted the debate be postponed until she would show up. More importantly, the programme’s other centrepiece, a review of the Birds and Habitats Directives, drew applause from the right while Green MEP Terry Reintke referred to her support for von der Leyen in 2024 and warned that “even my patience has an end”, with her colleague Marie Toussaint eloquently concluding that the Commission was throwing the laws “to the wolves in the midst of the sixth mass extinction”.
BERLIN TO DECIDE IN ECB MUSICAL CHAIRS
The race to succeed Christine Lagarde has two candidates; that’s double the choice compared to all previous appointments, even if both are men. Eurogroup president Kyriakos Pierrakakis named them last Friday: Pablo Hernández de Cos, the Spaniard running the central bank of central banks in Basel, and Klaas Knot, a former Dutch central bank chief. If you insist on the binary separation, one is considered a dove, the other a hawk, but both call themselves pragmatists, which is what central bankers say when they’d rather not commit. To make things more complicated, the appointment is linked to two other ECB top jobs, with Isabel Schnabel and Philip Lane leaving next year. France is allegedly supporting de Cos, which could tip the balance and suggest a deal where a northern central banker, probably German, takes up the chief economist role. Climate Believer Frank Elderson would stay on board, as Knot’s appointment would probably force him to resign to free up a chair for a consolation Spaniard. So now the call is in Merz’ hands in two weeks: insist on a proto-German Chair or settle for the chief economist role. Or keep dancing for a while — the music only really stops at the European Summit on 17 and 18 December.