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“Europe needs a stronger capital markets system and it needs a more unified banking system”, said Larry Fink yesterday at the Berlin Global Dialogue. The Blackrock CEO is thus expressing what is widely agreed at the high-caliber conference at the Berlin elite university ESMT: Europe’s companies need better access to capital so that the old continent remains competitive.
The fact that the political discussions between the EU states on the Capital Markets Union have been fruitless for years is therefore causing frustration. Christian Lindner now offers hope: “There will be progress very soon”, said the German Finance Minister at the conference. Specifically, he mentioned an EU-wide (28th) insolvency law regime and new impetus for the securitization market.
Government circles say that the EU Commission already has a proposal on the table to facilitate the securitization of bank loans. This should give banks more leeway in their balance sheets to grant further loans to companies. Consultation with the industry could begin shortly, it is said. Berlin believes it is realistic to expect the new legislation to be adopted by the Council and European Parliament as early as the second or third quarter of 2025.
It is therefore likely to take a little longer to set up a 28th insolvency law regime. The BMF has already been working for several months on the idea of specific new EU insolvency rules that bond issuers can choose as an alternative to the respective national rules. In the meantime, the Federal Ministry of Justice has agreed to pursue this path, according to government circles. This would allow the discussion to be raised to a European level.
The agreement between two FDP-led houses is no trifle: Across the EU, it is the justice ministries that have been putting the brakes on the harmonization of national insolvency laws for decades. Lindner now hopes to build a bridge over these concerns with the 28th regime. He hopes it will have a “magnetic effect” – many private providers would opt for this model. If it actually comes.
Have a great day!
An open power struggle has escalated between Manfred Weber, leader of the EPP parliamentary group and party, and the party’s Secretary General, Thanasis Bakolas. On Friday, Bakolas sent an email to the Presidium members in which he accuses party leader Weber of unlawful behavior. Weber had given Tom Vandenkendelaere, a former Belgian MEP, a post against the party statutes and made him “Chief of Staff”. Bakolas explained in the email that he had to dismiss Vandenkendelaere because of the breach of law. Bakolas is also said to have used the email to send Vandenkendelaere’s employment contract and to have distributed the content of private text messages.
It is not known in the EPP what happened between Weber and Bakolas to leave Bakolas in such a scorched earth situation. Weber cannot dismiss Bakolas because he was elected by the delegates and still has a valid contract until the next EPP party conference in Valencia. Bakolas was obviously aware that Weber would not put him forward for a new term of office.
Bakolas was appointed Secretary General by Weber in 2019. Bakolas is considered a confidant of Greek Prime Minister Kyriakos Mitsotakis. On Monday, the party’s governing bodies decided on the sidelines of the political assembly that the party would reinstate Vandenkendelaere in order to save Weber’s face. The power struggle has thus ended in Weber’s favor. Bakolas is probably out of the picture. It is not known whether Weber intends to propose Vandenkendelaere as the next Secretary General.
When Weber also took over the leadership of the party in 2019, he appointed a new Secretary General. He also dismissed the two deputy general secretaries and did not fill their positions. Weber is now initiating a fundamental reform of the party. The reform should be ready for decision by the party conference in Valencia in April. The preparatory work is currently underway. It is expected that Weber will run for the party chairmanship again in Valencia. Ursula von der Leyen is a member of the EPP presidium by virtue of her position as Commission President.
The EPP, which is a merger of national parties to form a European family of parties, is to become more powerful and attractive. For example, it is being considered whether the political assembly, to which the member parties send delegates, should be significantly streamlined and transformed into a party presidium. Critics complain that the substantive work in the EPP has been lying idle for years. The aim of the party reform is also to give the member parties added value in concerted campaigns.
According to reports, Weber also wants to restructure the parliamentary group. Weber has invited a number of people in leadership positions to talks and expects them to be given new posts in the next few days. Weber parted company with the EPP Group’s Secretary General, Simon Busuttil, in the summer. His former head of cabinet, Ouarda Bensouag, will be the new Secretary General. Busuttil hopes that Weber will find him a follow-up position, for example in the cabinet of a Commissioner. Meanwhile, it is clear that Michael Hager will remain head of cabinet for Economic Affairs Commissioner Valdis Dombrovskis. Hager, who has already headed Commissioner Günther Oettinger’s cabinet in two mandates, is considered the most influential German official in the Commission and coordinates the CDU-affiliated officials in the Commission.
Former Dutch EPP MEP Esther de Lange will not head the cabinet of Climate Commissioner Wopke Hoekstra (EPP). The position will be taken by Han ten Broeke, a former member of the right-wing liberal VVD in the Dutch parliament. As the Christian Democrats are not part of the government in The Hague, the parties involved had ensured that at least the head of the Dutch Commissioner’s cabinet would come from the ranks of the governing parties. It remains to be seen what de Lange will do.
The aim of the new French Prime Minister is to reduce France’s budget deficit to five percent by 2025 and to three percent by 2029. Barnier announced this on Tuesday during his government statement in the French National Assembly.
The French budget deficit for 2024 is expected to be six percent, which far exceeds the previous calculations of the government and the EU Commission. In May, the Commission estimated that the French deficit would amount to 5.3% of GDP in 2024. The French government itself had actually aimed for a deficit of 4.4 percent.
The primary way to reduce the deficit is to cut spending. “Cutting spending means giving up magic money, the illusion that everything is free, the temptation to subsidize everything”, he emphasized. “So in 2025, two-thirds of the recovery efforts will come from spending cuts.”
While the left-wing parties harshly criticize the budget cuts, Barnier is also trying to incorporate the argument of tax justice into his plans. In addition to budget cuts, Barnier is also planning tax increases. In a tense social and political context in France, Michel Barnier announced that an “effort” would be required from large and very large companies and the wealthiest French people.
Barnier wants to “require those large companies with high profits to participate in the collective restructuring”. For the time being, however, he is not giving any further details on what exactly such a measure would look like. The former EU Commissioner is of the opinion that the situation “requires a targeted, time-limited effort“.
France has been in deficit proceedings since July because it exceeds the deficit limit of three percent. This means that the government must reduce the structural deficit by at least 0.5 percentage points each year. It is still unclear whether Barnier’s budget proposal meets this criterion.
However, the deficit reduction achieved through one-off or temporarily limited tax increases does not count as a reduction in the structural deficit. In the next step, the Commission will submit a proposal to the Council in mid-November. It will then also become clearer what the Commission thinks of Barnier’s budget plans – assuming Barnier gets his budget through the French parliament by then.
Barnier is expected to present the detailed budget plan on Oct. 9. The plan must then be approved by the National Assembly. Barnier will have to rely on the votes of the right-wing populist Rassemblement National.
Barnier’s room for maneuver in terms of domestic policy remains very limited. One example of this is the pension reform, which was passed by parliament in spring 2023 with great difficulty and remains a hot potato in France. The entire left and the Rassemblement National are calling for its repeal.
In his speech to the National Assembly, Michel Barnier called for the dialog on this topic to be resumed. Although he considers it “imperative to preserve the lasting balance of our pay-as-you-go pension systems”, he explained that “some limits of the law adopted on April 15, 2023, can be corrected“. “We propose that the social partners consider reasonable and fair adjustments to the law”, he said.
The other burning political issue in France is purchasing power. In this context, Michel Barnier announced the increase in the minimum wage “by two percent from Nov. 1”. While the minimum wage had only risen mechanically with inflation in recent years, this is the first real minimum wage increase in a long time. The minimum wage (smic) is now €1398.70 net (€1766.92 gross).
Environment Commissioner-designate Jessika Roswall has not yet gained any experience in her area of responsibility; the 51-year-old lawyer’s CV has no direct links to environmental issues. Roswall has been a Moderate member of the Swedish parliament for the Uppsala constituency since 2010 and has worked on consumer and transport policy issues. She has been an EU minister since 2022, during which time she held the Swedish Council Presidency. In the new Commission, she will now be responsible for the environment, water resilience and a competitive circular economy.
Roswall succeeds the Lithuanian Virginijus Sinkevičius, a Green, as Environment Commissioner. The EPP, which has recently rebelled against several Green Deal and environmental laws, is pleased to see a colleague from its own ranks in this office.
Roswall will work under Competition Commissioner Teresa Ribera, to whom the Directorate-General for the Environment (DG ENV) will be assigned. Commission President Ursula von der Leyen has earmarked a number of tasks for Roswall. Together with Executive Vice-President Stéphane Séjourné, she will be responsible for a Circular Economy Act and propose a new bioeconomic strategy within this framework.
Von der Leyen is also tasking her with working on a legislative package for the chemical industry that is intended to enable “sustainable competitiveness” in this industry, simplify the REACH chemicals regulation and create clarity on the handling of perpetual chemicals (PFAS).
It is also to develop the European Water Resilience Strategy. The Commission had already announced a water resilience initiative last year, but then postponed it indefinitely due to protests from environmental organizations. Von der Leyen also wants Roswall to contribute to the Climate Adaptation Plan, particularly with regard to the prevention of forest fires.
Roswall’s to-do list also includes the “nature credits” that von der Leyen recently brought up for discussion. The aim is to promote private investment in environmental and species protection. This model could become an important element of agricultural policy in the coming years.
Some environmental politicians are sharply critical of Roswall’s appointment. As Swedish minister, she represented a government that put the brakes on important environmental legislation. For example, Sweden voted against the Nature Restoration Act and abstained when decisions were taken on the regulations on deforestation and carbon sinks (LULUCF). The Swedish government is primarily concerned with the domestic forestry industry, which it sees as being threatened by the legislation.
The governing coalition in Stockholm, led by the Moderates, is supported by the far-right and EU-sceptical Sweden Democrats (SD). The Sweden Democrats also include climate change deniers.
Green MEP Alice Kuhnke called it “worrying” that Sweden was responsible for environmental work in the Commission. Kuhnke’s party colleague Isabella Lövin struck a more hopeful note: “The Swedish government has betrayed its environmental and climate work in order to win the support of the SD. Jessika Roswall does not have to do this”, the MEP told the newspaper “ETC“. She hopes that Roswall will pursue an ambitious environmental and climate policy as Commissioner.
The European Parliament’s Environment Committee in particular is likely to have some questions for the Swede. Pascal Canfin, Liberal ENVI member, has already announced that he will use the hearings to gain “clarity” about Roswall’s role as Environment Commissioner.
Sweden’s Prime Minister, on the other hand, Roswall’s party colleague Ulf Kristersson, expressed his satisfaction that his country is providing the Commissioner for the Environment – and justified this in a written commentary for Swedish television by referring to forestry, of all things, for which Roswall is responsible. This statement is unlikely to calm critical voices. Sarah Schaefer
“Europe needs a stronger capital markets system and it needs a more unified banking system”, said Larry Fink yesterday at the Berlin Global Dialogue. The Blackrock CEO is thus expressing what is widely agreed at the high-caliber conference at the Berlin elite university ESMT: Europe’s companies need better access to capital so that the old continent remains competitive.
The fact that the political discussions between the EU states on the Capital Markets Union have been fruitless for years is therefore causing frustration. Christian Lindner now offers hope: “There will be progress very soon”, said the German Finance Minister at the conference. Specifically, he mentioned an EU-wide (28th) insolvency law regime and new impetus for the securitization market.
Government circles say that the EU Commission already has a proposal on the table to facilitate the securitization of bank loans. This should give banks more leeway in their balance sheets to grant further loans to companies. Consultation with the industry could begin shortly, it is said. Berlin believes it is realistic to expect the new legislation to be adopted by the Council and European Parliament as early as the second or third quarter of 2025.
It is therefore likely to take a little longer to set up a 28th insolvency law regime. The BMF has already been working for several months on the idea of specific new EU insolvency rules that bond issuers can choose as an alternative to the respective national rules. In the meantime, the Federal Ministry of Justice has agreed to pursue this path, according to government circles. This would allow the discussion to be raised to a European level.
The agreement between two FDP-led houses is no trifle: Across the EU, it is the justice ministries that have been putting the brakes on the harmonization of national insolvency laws for decades. Lindner now hopes to build a bridge over these concerns with the 28th regime. He hopes it will have a “magnetic effect” – many private providers would opt for this model. If it actually comes.
Have a great day!
An open power struggle has escalated between Manfred Weber, leader of the EPP parliamentary group and party, and the party’s Secretary General, Thanasis Bakolas. On Friday, Bakolas sent an email to the Presidium members in which he accuses party leader Weber of unlawful behavior. Weber had given Tom Vandenkendelaere, a former Belgian MEP, a post against the party statutes and made him “Chief of Staff”. Bakolas explained in the email that he had to dismiss Vandenkendelaere because of the breach of law. Bakolas is also said to have used the email to send Vandenkendelaere’s employment contract and to have distributed the content of private text messages.
It is not known in the EPP what happened between Weber and Bakolas to leave Bakolas in such a scorched earth situation. Weber cannot dismiss Bakolas because he was elected by the delegates and still has a valid contract until the next EPP party conference in Valencia. Bakolas was obviously aware that Weber would not put him forward for a new term of office.
Bakolas was appointed Secretary General by Weber in 2019. Bakolas is considered a confidant of Greek Prime Minister Kyriakos Mitsotakis. On Monday, the party’s governing bodies decided on the sidelines of the political assembly that the party would reinstate Vandenkendelaere in order to save Weber’s face. The power struggle has thus ended in Weber’s favor. Bakolas is probably out of the picture. It is not known whether Weber intends to propose Vandenkendelaere as the next Secretary General.
When Weber also took over the leadership of the party in 2019, he appointed a new Secretary General. He also dismissed the two deputy general secretaries and did not fill their positions. Weber is now initiating a fundamental reform of the party. The reform should be ready for decision by the party conference in Valencia in April. The preparatory work is currently underway. It is expected that Weber will run for the party chairmanship again in Valencia. Ursula von der Leyen is a member of the EPP presidium by virtue of her position as Commission President.
The EPP, which is a merger of national parties to form a European family of parties, is to become more powerful and attractive. For example, it is being considered whether the political assembly, to which the member parties send delegates, should be significantly streamlined and transformed into a party presidium. Critics complain that the substantive work in the EPP has been lying idle for years. The aim of the party reform is also to give the member parties added value in concerted campaigns.
According to reports, Weber also wants to restructure the parliamentary group. Weber has invited a number of people in leadership positions to talks and expects them to be given new posts in the next few days. Weber parted company with the EPP Group’s Secretary General, Simon Busuttil, in the summer. His former head of cabinet, Ouarda Bensouag, will be the new Secretary General. Busuttil hopes that Weber will find him a follow-up position, for example in the cabinet of a Commissioner. Meanwhile, it is clear that Michael Hager will remain head of cabinet for Economic Affairs Commissioner Valdis Dombrovskis. Hager, who has already headed Commissioner Günther Oettinger’s cabinet in two mandates, is considered the most influential German official in the Commission and coordinates the CDU-affiliated officials in the Commission.
Former Dutch EPP MEP Esther de Lange will not head the cabinet of Climate Commissioner Wopke Hoekstra (EPP). The position will be taken by Han ten Broeke, a former member of the right-wing liberal VVD in the Dutch parliament. As the Christian Democrats are not part of the government in The Hague, the parties involved had ensured that at least the head of the Dutch Commissioner’s cabinet would come from the ranks of the governing parties. It remains to be seen what de Lange will do.
The aim of the new French Prime Minister is to reduce France’s budget deficit to five percent by 2025 and to three percent by 2029. Barnier announced this on Tuesday during his government statement in the French National Assembly.
The French budget deficit for 2024 is expected to be six percent, which far exceeds the previous calculations of the government and the EU Commission. In May, the Commission estimated that the French deficit would amount to 5.3% of GDP in 2024. The French government itself had actually aimed for a deficit of 4.4 percent.
The primary way to reduce the deficit is to cut spending. “Cutting spending means giving up magic money, the illusion that everything is free, the temptation to subsidize everything”, he emphasized. “So in 2025, two-thirds of the recovery efforts will come from spending cuts.”
While the left-wing parties harshly criticize the budget cuts, Barnier is also trying to incorporate the argument of tax justice into his plans. In addition to budget cuts, Barnier is also planning tax increases. In a tense social and political context in France, Michel Barnier announced that an “effort” would be required from large and very large companies and the wealthiest French people.
Barnier wants to “require those large companies with high profits to participate in the collective restructuring”. For the time being, however, he is not giving any further details on what exactly such a measure would look like. The former EU Commissioner is of the opinion that the situation “requires a targeted, time-limited effort“.
France has been in deficit proceedings since July because it exceeds the deficit limit of three percent. This means that the government must reduce the structural deficit by at least 0.5 percentage points each year. It is still unclear whether Barnier’s budget proposal meets this criterion.
However, the deficit reduction achieved through one-off or temporarily limited tax increases does not count as a reduction in the structural deficit. In the next step, the Commission will submit a proposal to the Council in mid-November. It will then also become clearer what the Commission thinks of Barnier’s budget plans – assuming Barnier gets his budget through the French parliament by then.
Barnier is expected to present the detailed budget plan on Oct. 9. The plan must then be approved by the National Assembly. Barnier will have to rely on the votes of the right-wing populist Rassemblement National.
Barnier’s room for maneuver in terms of domestic policy remains very limited. One example of this is the pension reform, which was passed by parliament in spring 2023 with great difficulty and remains a hot potato in France. The entire left and the Rassemblement National are calling for its repeal.
In his speech to the National Assembly, Michel Barnier called for the dialog on this topic to be resumed. Although he considers it “imperative to preserve the lasting balance of our pay-as-you-go pension systems”, he explained that “some limits of the law adopted on April 15, 2023, can be corrected“. “We propose that the social partners consider reasonable and fair adjustments to the law”, he said.
The other burning political issue in France is purchasing power. In this context, Michel Barnier announced the increase in the minimum wage “by two percent from Nov. 1”. While the minimum wage had only risen mechanically with inflation in recent years, this is the first real minimum wage increase in a long time. The minimum wage (smic) is now €1398.70 net (€1766.92 gross).
Environment Commissioner-designate Jessika Roswall has not yet gained any experience in her area of responsibility; the 51-year-old lawyer’s CV has no direct links to environmental issues. Roswall has been a Moderate member of the Swedish parliament for the Uppsala constituency since 2010 and has worked on consumer and transport policy issues. She has been an EU minister since 2022, during which time she held the Swedish Council Presidency. In the new Commission, she will now be responsible for the environment, water resilience and a competitive circular economy.
Roswall succeeds the Lithuanian Virginijus Sinkevičius, a Green, as Environment Commissioner. The EPP, which has recently rebelled against several Green Deal and environmental laws, is pleased to see a colleague from its own ranks in this office.
Roswall will work under Competition Commissioner Teresa Ribera, to whom the Directorate-General for the Environment (DG ENV) will be assigned. Commission President Ursula von der Leyen has earmarked a number of tasks for Roswall. Together with Executive Vice-President Stéphane Séjourné, she will be responsible for a Circular Economy Act and propose a new bioeconomic strategy within this framework.
Von der Leyen is also tasking her with working on a legislative package for the chemical industry that is intended to enable “sustainable competitiveness” in this industry, simplify the REACH chemicals regulation and create clarity on the handling of perpetual chemicals (PFAS).
It is also to develop the European Water Resilience Strategy. The Commission had already announced a water resilience initiative last year, but then postponed it indefinitely due to protests from environmental organizations. Von der Leyen also wants Roswall to contribute to the Climate Adaptation Plan, particularly with regard to the prevention of forest fires.
Roswall’s to-do list also includes the “nature credits” that von der Leyen recently brought up for discussion. The aim is to promote private investment in environmental and species protection. This model could become an important element of agricultural policy in the coming years.
Some environmental politicians are sharply critical of Roswall’s appointment. As Swedish minister, she represented a government that put the brakes on important environmental legislation. For example, Sweden voted against the Nature Restoration Act and abstained when decisions were taken on the regulations on deforestation and carbon sinks (LULUCF). The Swedish government is primarily concerned with the domestic forestry industry, which it sees as being threatened by the legislation.
The governing coalition in Stockholm, led by the Moderates, is supported by the far-right and EU-sceptical Sweden Democrats (SD). The Sweden Democrats also include climate change deniers.
Green MEP Alice Kuhnke called it “worrying” that Sweden was responsible for environmental work in the Commission. Kuhnke’s party colleague Isabella Lövin struck a more hopeful note: “The Swedish government has betrayed its environmental and climate work in order to win the support of the SD. Jessika Roswall does not have to do this”, the MEP told the newspaper “ETC“. She hopes that Roswall will pursue an ambitious environmental and climate policy as Commissioner.
The European Parliament’s Environment Committee in particular is likely to have some questions for the Swede. Pascal Canfin, Liberal ENVI member, has already announced that he will use the hearings to gain “clarity” about Roswall’s role as Environment Commissioner.
Sweden’s Prime Minister, on the other hand, Roswall’s party colleague Ulf Kristersson, expressed his satisfaction that his country is providing the Commissioner for the Environment – and justified this in a written commentary for Swedish television by referring to forestry, of all things, for which Roswall is responsible. This statement is unlikely to calm critical voices. Sarah Schaefer