Welcome to Better Europe’s weekly update on EU Affairs.
SPRINT AHEAD OF ELECTIONS: DEADLINES EXPIRE, ANOTHER GERMAN SPITZENKANDIDAT
With a little more than two months left to the next European Parliament elections on 6-9 June, the second deadline to reach inter-institutional agreements on legislative proposals (trilogue deals) expires today. Initially planned for 15 March and now extended to 22 March, agreements before the second deadline can still be formally endorsed by the current Parliament in committee and its last plenary in April. However, legal-linguistic changes would however be to be formalised by the next Parliament. Any agreement reached as of next week will go into trilogue negotiations in the autumn for approval in what is technically referred to as an “early second reading”. Moving matters to the next mandate can be politically risky as the composition of the Parliament may change significantly and relations in the negotiating teams will have to be rebuilt. Meanwhile the liberal ALDE, the last European party supporting the lead candidate process, confirmed the nomination of another German Spitzenkandidat: Marie-Agnes Strack-Zimmermann from the FDP. The parties should read our blog on the Spitzenkandidaten process to know that there is no requirement for a candidate to be German, despite its German name.
LAST-MINUTE APPROVAL OF EU DUE DILIGENCE LAW SHOWS POWER OF MEMBER STATES
After several weeks of uncertainty in the Council fuelled by opportunistic and populist behaviours by several national governments, a “compromise” text on the Corporate Sustainability Due Diligence (CSDDD) received indicative support from a qualified majority of Member State ambassadors on 15 March. The text, which received the support of Italy in exchange for behind-closed-doors concessions on the Packaging and Packaging Waste Directive, is however not the compromise that was originally agreed with the Parliament. Instead, Member States approved a watered-down version of the deal put forward by the Council’s Belgian Presidency. The new text, which reduces the scope of the law by almost 70% compared to the interinstitutional agreement, was adopted as-is and without further negotiations by the Parliament’s Committee on Legal Affairs on 19 March. The vote is a cruel demonstration of the imbalance of power between Council and Parliament, formally recognised as equal co-legislators under the Treaty of Lisbon. EP rapporteur MEP Lara Wolters during the vote suggested the term “compromise” was both euphemistic and sarcastic. It is yet to be seen whether the growing tendency of legislative hostage-taking by Member States will scale down after the elections, or if this is the new normal the EU bubble will have to work with for the next five years.
MEPS SIDE WITH FINANCIAL INDUSTRY TO DEFEND KICKBACKS FOR RETAIL INVESTMENTS
Financial intermediaries who depend on kickbacks from product manufacturers for selling their financial products will be relieved that MEPs this week agreed that this is a good distribution model for financial investment products. In a vote in the Parliament’s Economic and Monetary Affairs Committee, French liberal MEP Stéphanie Yon-Courtin introduced her compromise package referring to the importance of protecting consumers and retail investors and the need to make this a priority for negotiations with Member States in the next mandate. Thanks to support from most of centre-right EPP, from the ECR and from ID MEPs including Front National and Lega Nord (who showed up in great numbers to support the compromise package), the reports on the Commission’s Retail Investment Strategy passed with a comfortable majority. As expected, consumer and retail finance NGOs BETTER FINANCE, BEUC and Finance Watch vocally disagreed that the sales kickbacks, discreetly referred to in EU bubble speak as “inducements” for financial “advice”, are good for consumers, and that MEPs should have at least upheld Commissioner Mairead McGuinness’ already timid proposal to just ban inducements for “execution-only” services, when no advice is given and a client is just asking their banker to execute an order on financial markets.