Written by Clare Ferguson,
Despite Parliament’s efforts to return to Strasbourg for its plenary sessions, the first session of October will again take place in Brussels, to avoid hundreds of people travelling to France during the coronavirus pandemic. The Covid‑19 emergency has also focused the agenda on efforts to ensure the health of the EU economy, particularly its financial markets.
A key moment in this session, however, will undoubtedly be the vote on Wednesday morning following the 2 October hearings concerning two changes in European Commission portfolios in a reorganisation made necessary following the former Trade Commissioner’s resignation. The International Trade Committee will hear Vice-President Valdis Dombrovskis, nominated to take over the Trade portfolio, and the Economic and Monetary Affairs (ECON) committee will hear Mairead McGuinness, Commissioner-designate for Financial Stability, Financial Services and the Capital Markets Union.
As reflected in the importance given to the financial portfolio, the vital health of the EU financial market is another focus of the session. Council and Commission will make statements on the role of the European Supervisory Authorities in the Wirecard scandal on Wednesday afternoon, followed by a joint debate on financial services. With the effects of coronavirus on the business world as a backdrop, Parliament will focus on proposals for further development of the capital markets union, particularly to offer small businesses and individual investors a wider range of investment options and help drive the recovery. As the potentially misleading statements Wirecard made to its investors illustrate, coordinated supervisory powers could help to protect smaller businesses and investors. The ECON committee report tabled proposes to remove barriers to investment; set up an EU framework for digital finance that provides high data protection and privacy standards (and challenges the dominance of large technology companies); promote financial literacy; and for the EU to consider equivalence decisions for suitable third-country markets. Reflecting the rapidly changing nature of the financial markets, Members will then debate an ECON committee legislative-initiative report with recommendations to the European Commission on regulating digital finance. The report takes a closer look at the emerging risks in crypto-assets and the regulatory and supervisory challenges. Fintech provides unprecedented opportunities for both a more efficient and transparent financial sector – and for financial criminals to escape detection. The ECON committee would like the European Commission to propose comprehensive supervisory measures to regulate crypto-assets, such as Bitcoin, to boost cyber-resilience in view of the vulnerability of such virtual assets to cyber-attack, as well as to improve the management of associated data. One new Fintech solution, crowdfunding, is a growing way for innovative small companies to obtain access to finance. The digital nature of crowdfunding service platforms also lends itself well to cross-border calls for finance, opening up the possibilities for investors and companies alike. However, the platforms also require careful EU-wide regulation to ensure they are managed prudently and that investors are protected. On Monday evening, Members will vote on ECON committee reports at second reading on a regulation on European crowdfunding service providers (ECSP) for business and related changes to the Markets in Financial Instruments Directive (MiFID II). The texts include measures to authorise, supervise and set operational and organisational requirements for crowdfunding platforms, and focus on protecting investors. The Commission will also make a statement on the fight against money laundering, following the release of the FinCEN files, on Thursday morning.
However, the need for careful husbandry of financial resources in such difficult times is also greatly reinforcing the desire for good financial management of EU funding. On Monday evening, Members will hear Council and Commission statements on a possible rule of law conditionality in the framework of the multiannual financial framework negotiations, to link EU funding more closely to the respect of common EU values and will debate a legislative-initiative report on establishment of an EU mechanism on democracy, the rule of law and fundamental rights.
The coronavirus pandemic also continues to have financial consequences for EU policy, and while Parliament has proposed new resources to fund the recovery, the budget for existing EU activities requires some adjustment. On Monday evening, Members will vote on amending budget No 7/2020, which updates the revenue side of the current EU budget, in view of the negative impact of coronavirus on the EU economic outlook, as well as other technical issues. Although income from value added tax and gross national income is falling as a result of the economic climate, and negative exchange rates have also had an impact, more positively, the amounts available from paid-up fines and penalties has increased. An update of the coronavirus measures is also expected to feature during the postponed European Council meeting of 1‑2 October, the conclusions of which Members will debate on Tuesday morning, as well as preparation of the next meeting, currently scheduled for 15‑16 October 2020.
One file that remains blocked in Council is the proposed directive to ensure gender balance on company boards, agreed by Parliament in 2013. Proven to improve the health, value and transparency of companies, Parliament has long supported the measures and called for progress on the file as recently as January 2020. Members will discuss the current state of play on Monday evening.
Turning to the EU’s ambition to achieve EU climate neutrality by 2050, a debate on Tuesday afternoon will discuss the Commission’s proposal for a new European Climate Law. While the Commission is proposing a 55 % reduction in EU GHG emissions by 2030, Parliament’s Environment, Public Health and Food Safety Committee (ENVI) is calling for greater ambition with an increased reduction target of 60 %. The ENVI committee calls for net-zero emissions by 2050 at the latest in the EU and in each Member State, and negative emissions after 2050. The vote on this file will determine Parliament’s position for trilogue negotiations once the Council adopts its position. A vital resource in the fight against climate change, for the European ecosystem and to rural economies, forests and woods cover almost half of the EU’s land surface. However, to date the EU has no policy on forests and the forestry sector, meaning that management of this precious resource is somewhat fragmented. Members will debate a report on Tuesday afternoon on the way forward for a European forest strategy. The strategy could pave the way for an ambitious approach to sustainable forest management that bridges the gap between national forest policies and EU objectives relating to forests, such as the European Green Deal and the 2030 biodiversity strategy