EU Agrees on Instrument to Support Reforms for Sustainable Recovery
As part of the measures to foster recovery from the COVID-19 crisis, EU announced its support for the reform efforts of member states to stimulate growth and put their economies back on track. In this context, the EU ambassadors endorsed the position of the European Council on establishing a "technical support instrument," that will contribute to mainstreaming climate actions and to the achievement of an overall target of the EU budget expenditures supporting climate objectives. The technical support instrument is also meant to complement the EC proposal for a recovery and resilience facility that will provide large-scale financial support for public investments and reforms to foster member states' recovery from the COVID-19 crisis. The instrument will support member states in the preparation and implementation of their recovery and resilience plans.
Member states have increasingly taken up technical support under the Structural Reform Support Program in the past; therefore, a technical support instrument should be established through a regulation, with a view to continuing to support member states in the implementation of reforms. Reflecting the European Green Deal as Europe’s growth strategy and the translation of EU’s commitments to implement the Paris Agreement and the United Nations’ Sustainable Development Goals, the technical support instrument will contribute to mainstreaming climate actions and to the achievement of an overall target of [25]% of the EU budget expenditures supporting climate objectives. Relevant actions should be identified during the instrument’s preparation and implementation and reassessed in the context of the relevant evaluations and review processes. This should also tackle broader environmental and social challenges in EU, including the protection of natural capital and the support to the circular economy and be in line with the 2030 Agenda for Sustainable Development.
The scope of the instrument includes financial-sector policies, such as those for the promotion of financial literacy, financial stability, access to finance and lending to the real economy and production, provision, and quality monitoring of data and statistics. It also covers policies for implementing the digital and the green transitions, e-government solutions, e-procurement, connectivity, data access and governance, and e-learning; the use of artificial-intelligence-based solutions, the environmental pillar of sustainable development and environmental protection, climate action; promoting the circular economy, energy and resource efficiency, and renewable energy sources; achieving energy diversification; and ensuring energy security.
The agreed upon position will serve as the basis for the Presidency in its negotiations with the European Parliament that are set to start as soon as possible. However, it does yet not cover the budgetary aspects of the draft regulation since an agreement on the overall next Multiannual Financial Framework was achieved only yesterday. The proposed technical support instrument is a successor to the structural reform support program. On the basis of this partial negotiating mandate, the Presidency will start negotiations with the Parliament as soon as the Parliament has adopted its position.
Related Links
Keywords: Europe, EU, Banking, Insurance, Securities, ESG, Climate Change Risk, COVID-19, Financial Stability, European Green Deal, Paris Agreement, EC, European Council
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
HM Treasury Publishes Policy Statement Amending Benchmarks Regulation
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies Finalize Rule to Reduce Impact of Large Bank Failures
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies Finalize Rule on Net Stable Funding Ratio Requirements
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
FSB Sets Out Effective Practices for Cyber Incident Recovery
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
ECB Publishes Eleventh Issue of the Macroprudential Bulletin
ECB published eleventh issue of the Macroprudential Bulletin, which provides insight into the ongoing work of ECB in the field of macro-prudential policy.
HM Treasury Seeks Views on Review of Solvency II Regime for Insurers
HM Treasury issued a call for evidence seeking views to reform the prudential regulatory regime—also known as Solvency II—of the insurance sector in UK.
ESRB Responds to EC Consultation on Review of Solvency II
ESRB responded to the EC consultation on review of Solvency II regime.
HM Treasury Consults on Phase II of Future Regulatory Framework Review
HM Treasury launched a consultation on Phase II of the Future Regulatory Framework Review, with the comment period ending on January 19, 2021.
EC Publishes Work Program for 2021
EC adopted the work program for 2021.
