Committee on Economic and Monetary Affairs Ordinary meeting
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ECON European Parliament
Follow its sittingsMákis Keravnós
Compliance with the new framework to combat economic and financial crime, notably the EU anti-money laundering package, is also crucial for safeguarding financial stability. This must be accompanied by stronger cooperation among member states, EU agencies, and the private sector. Turning to taxation in the area of international corporate taxation, we welcome the agreement reached within the OECD Inclusive Framework in January 2024 on a side-by-side system. This allows the 15% Pillar Two minimum tax rules to coexist with the alternative minimum tax rules of the United States. The Cyprus presidency will continue facilitating coordination until you level to ensure coherence and avoid unnecessary duplication between the work in the OECD Inclusive Framework and the United Nations process on a framework convention on tax cooperation.
We have set an ambitious timetable, and we'll work to achieve substantial progress in the Council on the revision of the tobacco taxation directive. Modernizing the EU's tobacco excise regime is important to better align it with public health objectives and internal market principles. The Cyprus presidency is prioritizing targeted revisions of the carbon border adjustment mechanism to prevent a set of inventions, simplify procedures, and implement fixes needed after the pilot phase. This proposal is essential to prevent carbon leakage while supporting the EU's objective of climate neutrality by 2050. In parallel, the council is advancing work on the establishment of a temporary decarbonization fund.
We are confident that substantial progress can be achieved towards establishing a Council negotiation mandate by the end of our presidency. Let me now conclude by saying that Europe's geopolitical and structural challenges require determined and unified action from co-legislators. On a positive note, let me also highlight that, according to the latest Eurobarometer figures, EU citizens' trust in Europe remains high. A big majority considers that their countries benefit from membership in the European Union. The Cyprus presidency is committed to playing its full part in strengthening Europe's long-term competitiveness, productivity, and sustainable, inclusive growth.
I look forward to continuing our dialogue and close collaboration throughout our presidency. Thank you.
Aurore Lalucq
Thank you. I will now give the floor to the member of the account committee, and I will start with Mr. Ajit Pantela for APP.
Michalis Hadjipantela
Thank you, Chair. I would like to welcome our minister to the European Parliament committee. I'd like to wish him and Cyprus a successful presidency, and the committee will be here to support you. The question I would like to ask Mr. Kerabnos is, as I am a former president of a bank in Cyprus and a supporter of the digital euro. What are your remarks about what we have to say to my colleagues who are against the digital euro because they consider it something expensive and something that can be provided by the private market, by the private sector?
So, what is your answer to the critics of the digital euro?
You have three minutes for the answer.
Thank you.
Mákis Keravnós
Thank you very much for that question. The single currency package, as you know, has two rules about the digital euro and the monetary policy of Europe. Last December, the council gave a negotiating mandate on three regulations. The major benefits that we expect from a quick adoption of the digital euro are manifold. Firstly, we will show citizens that the digital...
Euro and cash.
Is, can coexist. It will make transactions more flexible and resilient. With the digital euro, we'll also be able to better protect data in transactions that citizens are performing in a digital world. It will also improve our strategic autonomy in Europe with regard to payment technologies, and it will contribute to the collective resilience of the payment systems. For citizens, that means greater choice and easier payments.
Businesses will have a cheaper alternative compared to international payment systems. Banks will be able to develop new payment services, and that could potentially have a big impact on a European scale. Banks could develop new payment services that can be used all around Europe. Thanks to a balanced compensation mechanism, banks would be fairly compensated for their involvement. So we want to get a digital retail Europe as soon as possible, both online and offline, as a major plank of our monetary sovereignty.
Now, when it comes to concerns about this, Digital Euro will be chosen by the European Central Bank, and it will be overseen by it. Any costs will be covered by profits generated by the Digital Euro app. Only the parliament will be able to be involved in these negotiations, and we hope that they will occur in spring.
Aurore Lalucq
Thank you so much. And, indeed, there will be a shadow meeting tomorrow on the Digital Euro, and there was an important vote from the European Parliament two weeks ago showing some support for the digital euro. But thank you for this very clear message. I now give the floor to Nicolas Papandreou for one and a half minutes.
Welcome.
Welcome.
Nikos Papandreou
Committee. The CPO presidency, first of all, had a very good presentation with very clear priorities, and I think our group supports almost all of them, as you put it. We're now in the middle of the MFF, and the focus in our parliament has been on the investment tools, with reference always to Leta and the Draghi report, to mobilize private capital at scale and to strengthen our competitiveness. Now, for smaller member states like Cyprus and even Greece, Invest EU has been one of the Union's most effective instruments by leveraging EU guarantees to support small and medium enterprises and innovation. I'm hoping, and this is the question: can we count on the Cypriot presidency to support a strengthened role for Invest EU in the next MFF, rather than, as we hear, seeing it diluted or completely replaced?
Thank you.
Thank you.
Mákis Keravnós
Thank you very much. InvestEU is a tool that allows us to finance SMEs. And, as we all know, most European companies are SMEs. That tool played an important role in the development or growth of these SMEs, especially during recent financial crises. It seems like we're in a permanent crisis now, but I'd like to add that investors also contributed to the creation of small and medium enterprises.
It seems that they are trying to bring it under Pillar Two of the MFF, the European Competitiveness Fund. I think it should continue to be a tool that helps finance SMEs. Of course, the MFF is being discussed in the Council of Foreign Affairs and at the heads of government level. We have to guarantee that, in those negotiations, that tool continues to reflect the needs of small and medium enterprises. It's absolutely vital.
The Cypriot presidency continues to have dialogue with all stakeholders and, of course, with the parliament. And it is trying to strengthen SMEs because that's how we can improve competitiveness in this very complex context, as SMEs also contribute to creating jobs. Thank you.
Mireia Borrás Pabón
Thank you, Chair, dear Minister, dear colleagues. My colleague, Eniko Viori, cannot be here today due to political arrangements, so I'm going to speak on her behalf. Dear Mister Kerafnos, with the EU having issued large volumes of common debt under the Next Generation EU, the SURE instrument, and the €90,000,000,000 macro-financial assistance loan to Ukraine, debt servicing costs are rising. Do we know how much this burden is now and how much it will evolve during the coming years? Is the Cyprus presidency considering this interest burden in its work on the file of economic governance?
And the last question is: how does the presidency intend to manage the growing interest burden on the EU budget? And can you clarify whether member states will expect additional requests for national contributions, new own resources, or expenditure cuts as ways to finance this cost? Thank you so much.
Yes.
Mákis Keravnós
The questions that you've raised are something that is under discussion in the context of the MFF. I don't want to preempt the results of the horizontal discussion regarding the financial part of the MFF or those in the General Affairs Council. I think things are still in the early days. However, the council fully agrees that we need to give the EU the necessary resources to take action, and we are convinced that there will be a positive outcome from those discussions. According to the council's role as defined by the treaties, it sets out the general political priorities and directions of the Union.
Then the leaders must be able to give political guidance on such a strategically important subject as our long-term budget.
Thank you.
Thank you. For a new one.
Gilles Boyer
Thank you very much, Madam Chair, Minister. Thank you for being with us today. You mentioned one of the key subjects of your presidency, and that's the market integration package. Now, that's an essential element for realizing the saving and investment union. The council, and I think the parliament too, would like a high level of ambition.
The ambitions of the proposal are very clear: to create a more integrated financial system that is more effective and more competitive. It should offer European citizens better choices and better opportunities when investing, and that should also be at the service of the real economy and the overall European economy. Now, I think there's a growing realization that we need to move quickly on this file. How do you plan to facilitate progress in the council as we enter into negotiations? Will we go beyond the declaration of intentions, which I think we all agree about, to something more concrete?
Opposite.
Mákis Keravnós
As you know, the market integration and supervision package and the savings and investment union are a priority for reasons that I don't need to explain. They have been explained by many others before me. Last January, negotiations began. But there is still a long way to go in that negotiation. It's quite complex.
I think there are 18 different areas of legislation. In March, we'll begin discussions on some more technical issues, and our goal is to make as much progress as possible. The efforts that are being made at a technical level are with the intention of speeding up this whole process so that, as a presidency, we can make as much progress as possible towards completing this. We want to draw conclusions. We were hoping for it to happen in June, but we might try to move it up to May.
Of course, there are many issues that are part of the savings and investment union, such as the digital euro and securitization. And as a presidency, we are ready to start trialogues as soon as the Parliament is ready to begin discussions.
Gaetano Pedulla'
Thank you, Chair Lalouk. I prefer speaking Italian. Thank you.
Thank you very much. Thank you, Minister. Now, you stated very clearly what your position is on the digital euro. It's a position that we in the left group appreciate. But our chairwoman, Mrs. Le Luc, mentioned some of the previous stages that this file has gone through in Parliament.
There's a lot of resistance. There's resistance from the banking system and from this very committee when it comes to moving forward with the digital euro. You said you are hoping that this will move forward. But in your term in the presidency, will you be taking any initiatives to move this forward? Second question, what's your view on the 28th regime?
It will have an impact on the savings and investment union, of course. Third question, also on savings and investment union. We're awaiting to see how this file progresses, but are there real distortions when it comes to the position of companies? I can give you an example. In 2025, in Italy, Italian banks had profits of 10% to 13%.
That's €28 billion, more or less. But loaning loans only went up by 0.8%. So, 13% extra profit, but jobs went up by 0.8%. You talked about small and micro-enterprises. The lending to these companies went down.
So, over the course of your semester, would you put at least a sticking plaster on this distortion?
Mákis Keravnós
With regard to the digital euro, I think I've already explained our position. And on the intentions of our presidency, I think I've spoken as well. I think we mustn't ignore geopolitical developments and everything that's happening around us, because they directly affect us in our daily lives. So, I think we need to be proactive and ready when we need to provide solutions. The single market is essential to improving the competitiveness of the European economy.
I think none of us are in any doubt that Europe is years behind in many sectors. So, it's time to take steps forward to have a single market that is not fragmented and create opportunities to invest in productive sectors to create new companies, so that we can create jobs. But also, within the transition of our economy and our society, where some jobs are phased out, we have to be able to transition to new types of work. Luckily or unluckily, we are not going to be able to avoid those developments. And those are developments that are going to occur on several levels, and they're going to have a lot of fallout on political, social, and economic levels. Of course, we might have to undertake some reforms and look at some of our concerns, but we really need to have an honest, open dialogue in order to get the best solutions possible.
Thank you.
M. Thank you.
Eero Heinäluoma
You, Madam Chair. Also, I would like to express my gratitude that the minister is here expressing the ideas of the Cyprus presidency. My team is the Market Integration and Supervision package, which has already been mentioned here. And obviously, you have quite a challenging file on your desk as president. My group believes that we should set the level of ambition high with this package, as this is key to giving the EU a kickstart in our economy, and I totally agree with what my renewed colleague said earlier.
In today's global world, the EU cannot stumble further with a completely fragmented market organization. And this ought to be acknowledged by all of us and also all Member States. At the end of the day, fragmented regulation, even if it is adopted with the best intentions, is too often an obstacle to scaling up and has a price, which is ultimately shifted towards EU citizens. So my question here is, how are you planning to turn this package into a success, which will support the EU economy? As a presidency, how do you consider the dynamic in the council between different member states, given that in the end a lot boils down to mutual trust?
And what is your view on the activities of six member states wanting to go faster and further than the others?
Thank you.
Mákis Keravnós
Thank you very much for that comment. I think our ambition is clear. We want to reduce fragmentation. We want to reduce costs and improve resilience by creating a more united capital market. Regarding our priority with respect to the savings investment in Europe, this package is very important.
We're starting to look at the proposals we began last year, and we are continuing in order to cover all aspects and to take into account all the different perspectives. But we are at a very early stage. However, the council wants to achieve results that are in line with its ambition regarding this package. I hope that you have understood how ambitious we are and consider us as co-legislators, so that we will together achieve results for the citizens we serve. It's a difficult job, but we are ambitious.
We're decisive. We want to make progress on this subject because we do not have time to spare. When it comes to bringing the EU into the future. In a shifting world, we really cannot waste any more time. Thank you.
Did you say something else?
Yes. I apologize.
Mákis Keravnós
You talked about the six member states who want to go faster, and I did not answer. Yes. This is an initiative that arose quite suddenly from six member states, larger member states, I would say, of the EU. The presidency's position is that any initiative that contributes to the acceleration of procedures is welcome. However, we need to be careful because we don't want to encourage any further fragmentation of the European Union.
What we are doing is working towards the abolition of, or getting rid of, fragmentation.
Aurore Lalucq
Thank you. Any requests for the floor? No? No. No?
Okay. Well, you have a couple of.
Well,
Mákis Keravnós
Before I finish, I'd like to warmly thank you for the invitation and the opportunity to meet with the European Parliament, especially the ECON Committee. It's a unique opportunity to be here and listen to people who are direct representatives of European citizens. I think it's particularly important because the European Parliament's role in this area is vital, and I do hope that we will continue to have regular direct contact between the Council and the Parliament. Thank you very much.
Aurore Lalucq
Thank you. Thank you for being here today with us, and very happy to see you in Cyclus. Thank you so much. Okay. So, I would like to welcome Mr. to this public hearing in Econ.
François Louis Michel, Executive Director of the EBA. Today's hearing is organized in the context of the procedure for the appointment of Mr. Michel is the chairperson of the European Banking Authority, which is governed by Article 48 of the EBA regulation. By the later part of February 4, the council announced to the European Parliament its intention to adopt a decision on the appointment of Mr. François Lou Michel is the chairperson of the EBA, subject to Parliament confirmation.
So this formal hearing in public session serves an important role in the context of the accountability of the EBA to this Parliament. The procedure is always the same. So, you will have an opening statement, maybe six or more minutes, and then there will be a Q&A session with the Econ Member. And welcome to the Econ Committee.
Thank you.
Thank you very much, Chair.
François-Louis Michaud
Of course, the working language at the EBA as well. Madam Chair, honorable members of the European Parliament, first of all, let me thank you very much for the opportunity to appear before you today. I applied for the role of EBA chair because I believe that the authority is at a turning point. I also believe that it has an important role to play, and I believe I can help make it a useful instrument for your action as co-legislators. We are indeed at a turning point.
We are at a turning point because, over the past 15 years, there have been sustained efforts from the private and public sectors to make the financial sector safer in the EU. And this has worked overall. Our financial institutions have absorbed very severe shocks in recent years: COVID, energy prices, inflation, geopolitical tensions, and idiosyncratic shocks in various jurisdictions, with no damage. The dam has held on. If I were to summarize, this is good, but it is not enough. Looking forward, the EU banking and financial sector needs to prepare now for new and unprecedented challenges, including a multipolar world with open conflict in several regions, as well as demographic, environmental, and digital transitions.
All this will very clearly affect the way our economies operate. It will also bring huge financial or financing needs and new types of risks for our economies. European banks need to prepare for this. They need to provide, of course, adequate funding. They also need to be prepared themselves to manage those risks, and they also need to support all types of economic agents in managing their own risks.
Against that background, the EBA has a very important role to play, but it needs to play it differently than it has in recent years, as the world is changing fast. The EBA indeed was created 15 years ago with a clear mandate. It was about facilitating the interaction between the legislators and the authorities on the ground. It's a small organization that should act as a link between these two levels. It should provide grounded expertise and evidence to the legislators.
And in return, it should turn their policy objectives into practice and make sure that this is effectively implemented on the ground. This model is still a very modern one. It's agile. It remains very valid. But the way it works and what it delivers now need to evolve.
And I would say that the EBA should now pursue three main objectives. And the first objective is that the EBA should become a true next-generation regulator, if I may say so. What does that mean? I'll come back to that in a moment. Secondly, the EBA also needs to be a fully-fledged supervisor at the frontier.
That is in those limited selected areas like DORA, MICA, or EMEA, where you legislators have given EBA a role because no supervision existed before, and still those are innovative areas where something needs to be done. And thirdly, the EBA needs to be a sort of back office for competent authorities in order to best support them in their daily tasks, avoid that everybody is doing the same or tackling the same challenges separately, and has to reinvent the wheel, especially in areas like data, digitalization, and AI. Let me come back for a second to the need for the EBA to become a next-generation regulator. By this, I mean three things. Firstly, and very importantly, the EBA should simplify its rulebook and make it more efficient.
Year 2026 will mark the 15th anniversary of the EBA. It also marks the 12th anniversary of the SSM. We are not in buildup mode anymore. We cannot pretend that we are a startup. Practice is there.
They are well-established. Robustness has been tested. There is maturity in the system. For all those reasons, it's high time for us to check whether all the rules that we've helped develop over the years are still relevant, fit for purpose, or even whether they are simply needed. Importantly, we need to check what needs to be done differently and what needs to be complemented. In other words, we need to get the balance right between the hard-won resilience, which needs to be preserved for sure, and the efficiency of the system.
It's not about the regulation; it's about efficiency. Without weakening the framework, there is room for more proportionality, for reducing compliance costs, and for reducing its complexity. More flexibility would avoid the risk of a one-size-fits-all approach. It should help accommodate diversity in banks' business models. This, of course, requires that there is trust within the supervisory community, and this is still an area where progress can be made.
Secondly, being a next-generation regulator also means bringing forward more forward-looking solutions. In the current environment, many causalities and correlations are breaking down. This calls for modern tools such as sensitivity analysis, scenario analysis, and stress testing. We cannot rely on the certainties of the past. And last but not least, being a next-generation regulator means that we need to be fully accountable to all stakeholders and, first and foremost, to you, the legislators.
As the EBA chairperson, I would be fully committed to working closely with you and your teams in formats like this one today, but also in the context of closer, more informal sessions, as you wish, to help you find the solutions you need and also to report to you very precisely on how we are executing the mandates you are giving us. Let me conclude by saying that I can put the EBA on the right track to address these challenges and find a new equilibrium between stability and efficiency. Over the past 30 years, I've held responsibilities in banking regulations, supervision, and financial stability. I've worked in four different countries and in European and international organizations for more than 16 years. I had to deal with conceptual and practical issues related to large and small banks alike, in peacetime and in times of crisis. I've come to a clear diagnosis over the past 5 years of what needs to be done in the coming years, and I believe I can implement it.
I'm not saying that this will be entirely easy. But I believe that it is very necessary, and I am passionate about ensuring that EBA gets it right and about working with you on that agenda. Thank you for your attention.
Aurore Lalucq
Thank you so much. I now give the floor to Christophe Gomard for HP.
Thank you, Madam Chair.
Christophe Gomart
I'll speak French. The European Banking Authority, as a guardian of the European banking supervisory system, is also responsible for ensuring its resilience and for consumer protection. And yet, for the past 10 years, we've been seeing a major loss of power in our banking system in Europe vis-à-vis the U.S. S. Banking system.
I'm thinking in particular about the questions of investment and financing. When it comes to mergers and acquisitions, between 2014 and 2024, the number of European banks involved in the top 15 went from 5 down to 2, and the market share went from 12% to 5%. Now, in order to obtain financing, our companies and our governments in the future will be forced to go to foreign banks. Now, given an increasingly tense geopolitical atmosphere where we see any sort of dependency could be used against us, what will the European Banking Authority do in order to address this vulnerability? Thank you.
François-Louis Michaud
You have the floor, Mr. Michel, for three minutes. Thank you.
I think you are raising a very important topic, which is the strategic autonomy versus the availability of credit. If we look at the availability of credit within the Euro area or within the union as a whole, it has been okay over the past 10 years. There was no shortage of credit. It has been well accompanying the different phases we have been through, including during COVID, etc. So, there was an expansion.
There was credit expansion across the board for retail, SMEs, and large corporations alike. So, on that account, there was availability of credit, and there was no credit crunch. But you are absolutely right that the market share of the most sophisticated banks in the European Union in certain segments has been shrinking. And this is a trend that hasn't started only over the past 10 years, but it started even before, in fact. Even before Basel III was agreed upon, there had been a long erosion of their market shares.
And there are a number of factors to that, but one in particular has to do with the way European banks versus American banks have reacted or responded to the financial crisis in the years 2007 and 2008. We've seen a big concentration of banks in the U.S. S, whereas the market shares of the European Union banks have remained almost flat in the EU. We don't have the same dynamism in the economies. That also means that it is more difficult for EU banks to withstand the shocks of the economic cycle.
And also market structures like securitization in the U.S. S, which do not fully exist or do not sufficiently exist in the EU. For all those reasons, indeed, it has been more difficult for European banks to accompany certain large corporations, and competition has become tougher. On the other hand, there is sophistication in the activities they conduct. So, in certain market segments, they are still extremely good at what they do, and a number of things have been invented by EU banks.
So, I think it's not so much something that regulators can completely define. It's also for corporations to decide with which banks they want to work. And I think that this new notion of defense and security, indeed in the EU, and the strategic autonomy should also lead market forces to take that into account. But it's difficult from a regulatory perspective to say that economic agents should work with one type of bank versus another type of bank. The U.
S. The bank is also licensed in the EU. They are fulfilling all the criteria of EU legislation and regulation. And indeed, that's a pricing issue in the end. If they are more competitive and the players don't see a strategic risk, then that's how they successfully compete.
But indeed, I think in the context of what you are raising—simulations, crisis simulations, and the fact that geopolitical tensions are now much more taken into account by boards—this will certainly help them reconsider the way, I mean, about non-financial corporations. It will help them also reconsider their preferences for the way they are getting their financing.
Thank you.
Jonás Fernández
You, chair. I'll speak Spanish. I'd like to start by thanking you for coming to join us here and for going through this hearing. You've been working at the European Banking Authority for several years now. I have got a couple of comments, really more than questions.
The first has to do with this next-generation regulator that you were talking about in your introductory remarks, saying that the European agencies are moving now to a second phase of development after 15 years of being in existence. Now, in the Capital Markets Union package that was presented by the Commission last December, we saw some ESMA reforms included, as well as questions related to ESMA governance. I wonder what you would have to say about the governance of the European Banking Authority and if you would see any room for improvement in its functioning as an agency. And my second question is related to this whole simplification debate that we have been having. The division of labor between level one and level two, and the whole question of delegated acts being sent to level two, but then also the islets that you have in level three that you published.
I'd just like to hear your thoughts about the situation surrounding that, and whether you think we could improve the regulatory framework in some way by improving the consistency between the different legislative and regulatory instruments that we have. Thank you.
François-Louis Michaud
Thank you very much for your questions. On the first part, and whether governance needs to evolve, indeed, I've been able to observe that from the inside very closely. And I think we are fine. We are fine in the sense that, for what we need to do, which is about creating a framework that's conducive to having the right funding provided in the right conditions for the entire EU, we need a lot of buy-in, and we need to make sure that there is sufficient recognition of local market features. And for that, we need the entirety of the union and the entirety of our members so that we can really appreciate the local conditions and how regulation needs to adapt to them.
Otherwise, we would fall into the risk of a one-size-fits-all approach, and we may disregard some important features of our economies and financial sectors. So, I think for this first part, the fact that we have a large constituency is really good. For the second part of our mandate, which is also about fostering supervisory convergence, we have been able over the years to take tough decisions in a number of cases in the context of peer reviews, for instance, where we came up with assessments that were not necessarily very favorable for some of the members, to say the least, and were critical about the way they were performing their duties. It has also been well supported by the governance of the EBA. So, there was no problem with the fact that the competent authorities were around the table.
I would also say that having around the table not only micro supervisors but also authorities who are often macro supervisors, as well as having a resolution authority with the ESRB, the Systemic Risk Board, and a few other observers, including ESMA, is important. And EIOPAY is a plus for us because it gives us the full perspective about the framework and ensures that we can really deal with cross-sector or cross-cutting issues. As part of that, I believe this should help us provide an impact assessment of how the framework works, which I think is needed at the moment. One of the big things EBA could help do in the future is provide legislators with an impact assessment on a regular basis about how the system works. So for that part, I think the governance has been fine.
Now we're also getting new tasks, and that's the case, for instance, for DORA and Mika. For DORA, we are handling that in the context of very strict governance, which has been defined in Level One. And ultimately, it goes to the Board of Supervisors of the EBA because all the authorities in scope are significant providers, mostly for banks. So, there is no excessive complication. But before, there are also discussions in the context of the Oversight Forum with all sectors being represented, which is also important.
And I would say that we can also rely on the joint committee that brings together the three ESAs: EBA, ESMA, and EIOPA, which allows us to deal with digital issues, environmental issues, and all those things that are cross-sector. So, I think, for me, it's working fine. We'll have to see with MICA in particular if this governance framework is good enough for taking quick decisions when we have to. But we are not in a situation where we have had to take many such decisions so far. It's more about creating the environment.
On the simplification debate, indeed, we need to make sure that there is better integration of the three levels: level one, level two, and level three. I will also include, beyond level three, what supervisors themselves issue. I mean, their guidance also issues a lot of expectations vis-à-vis the industry. And all those things need to be looked at consistently. And indeed, we think we've reached a complexity that is very difficult for banks to manage.
For small banks, it's a significant compliance cost. For large banks, which fall within the middle of many rules and complex mechanisms, it is also very difficult for them to manage. I'm thinking about the capital stock for them, in particular. We need to take a holistic picture of all that. We need to revisit the consistency of the entire framework.
I think that we can also help by interacting more with you at an early stage of policy developments to bring you facts, evidence, and help you test ideas. And I think we should also be much more in touch with you during the phase where we execute your mandates, to raise the difficulties we face at times and avoid, at the end of the day, producing something at our level two which is much more difficult or much more complex than what you had in mind in the first place. So, I think there is a lot of work to be done together to ensure this alignment between the three levels and avoid a proliferation of texts.
Aurore Lalucq
Thank you. Think Stephanie Uncortin. She's here. I don't know, Stephanie, if you want to take the floor right now or if we should go to the second round of questions. But it's up to you.
Not just take your time.
Stéphanie Yon-Courtin
Thank you very much, Madam Chair. I'm sorry, I was a bit late there. Mister Michaud, thank you for being with us today. We've noticed the early departure of your predecessor, Jose Manuel Camper. And I realize that your experience within the EBA is a real asset for continuing the work internally.
The coming years are going to be important for the European banking sector. Challenges are multiplying. Autonomy is going to be a major concern. And when it comes to competitiveness at the world level, what is your view of banking consolidation in Europe? Under what conditions do you think it should be encouraged?
And when we talk about simplification, it cannot mean deregulation. The regulatory framework has to be stable and ambitious, but we also need to allow our banks to compete at the international level. How can we do that correctly? What is your position? And finally, dialogue with public and private actors, including the European Parliament.
That's an important part of your work, as it is for any European authority. So, can you guarantee that we will have regular exchanges of views with the European Parliament? And if the answer is yes, then how do you plan to do it?
François-Louis Michaud
Thank you. Thank you very much for those questions. I'll answer in English if you allow me. The first point on consolidation: I think it's been very clear that European authorities, including the EBA, have always said they would favor more consolidation in the system. And of course, they believe that the conditions are there to have this consolidation in the system.
The fact that the SSM was created in December ago, and that we also have a resolution, yes, the banking union is not complete, but at least we have the key elements. There has been a lot of harmonization that we at the EBA have been providing over the years, which should facilitate this consolidation. Banking is about scale. So, for sure, there's room for banks to grow. And at the same time, there's a trade-off between efficiency and stability.
So, we wouldn't like to fall, of course, into a too big to fail situation, but I think we are far from that. So there's room for having more banks or larger banks and more large banks in the system. At the same time, it should be led by market forces. It's not for regulation to enter into industrial politics, we believe. And in that sense, it's important that the financial sector itself sees the benefits of this consolidation.
Again, the conditions are in place. We've seen many movements in different countries. Many times, it starts at the international level. They want to consolidate first before they engage in cross-border or, not cross-border, I wouldn't say cross-border in the EU, but at least in cross-members operations. But I think we see a little of that now.
The fact that banks have now also become more profitable, price-to-book ratios are up, and that they've been enjoying a number of quarters of high profits will probably help in that direction. We also need diversity in the system. So, we don't want to have only large banks. We also need to have banks that are close to their customers and that can effectively accompany the different types of corporations and retail customers they have and serve. So for that, we also think, and I think it's been the way of working at DBA, that the rules we produce should facilitate and encourage this diversity, and recognize this diversity.
That's the way, for instance, we've been designing those guidelines, making sure that supervisors do not necessarily push in one direction, but that they fully acknowledge different types of business models. Simplification is key. We touched on that before. First and foremost, I think we need to take a holistic look at the rules we've been creating so far. So, to make sure that we don't have a situation where different types of authorities—micro authorities, macro authorities, resolution authorities, AML authorities—are all streaming in their own lanes.
We need to make sure that there are mechanisms to bring them together and ensure that what they produce makes sense. And I think at the EBA, we can help with that because, precisely, we have this constituency. We have our Board composition that helps bring all those authorities together, so we can discuss that. And there, if you want to give us a mandate for that, we would be very happy to work actively on it. We also need to cut red tape in general.
It has been very heavy in terms of reporting over the years. All that was well inspired after times of crisis. We thought, okay, we need to be able to know more. We need to do better. Supervisors need to be well-equipped.
In practice, in crisis times, what people do is turn to banks and ask for fresh information directly from the management information systems. They're not the first to look at reporting data. So, I think here we have the potential to shrink the complexity and the burden that come from regulation a lot. We've given ourselves an objective of 25%, but I believe we can do more. And we can also make sure that authorities share more amongst themselves instead of asking the bank several times.
So I am advocating for mechanisms that will allow that to happen at the bank level, but also for the system as a whole. And the dialogue, I touched on that. So I'm very open to having an ongoing dialogue with you in that context, but also in the context of smaller groups with your teams, with my colleagues at the BA visiting you, explaining to you what the difficulties we are facing are, trying to make sure that we understand the request in the first place, and so on and so forth. So, that's for me the main objective of the next 5 years.
Aurore Lalucq
Thank you. Second round of questions: one minute for the question, two minutes for the answer, and I will start with Mr. Giovanni Tella from ABB.
Michalis Hadjipantela
Thank you, Charles. Thank you for the presentation. Can you identify one specific regulation where you disagreed with the majority position taken by the European Banking Authority during your tenure as Executive Director, and where your position would have led to an outcome of more simplified banking regulation, which is one of the major objectives that the European Banking Authority has to deliver? Also, you mentioned during your speech putting the European Banking Authority on the right track. What did you do in your role on the executive board to put the European Banking Authority on the right track?
François-Louis Michaud
Thank you for your question. Maybe, if that's okay, we'll start with the second question. I think, for me as the Executive Director, the role was to put the authority in good order for the chair to run the policy agenda. And I think that's what I've been doing over the past 5 years. And I'm happy to report that from all perspectives—the audit assessments, the European Parliament discharge process, and staff satisfaction—everything is positive.
We've been running internal surveys. The situation is positive. So I think the instrument is there and works well despite all the shocks we've been through. That's been working very well, and we've been able to execute our work program year in, year out, at a very high level. Just to give you an example, in 2025, we executed 92% of the work program despite a number of challenges.
Last year, we executed 93% of the work program, which means about 350 to 400 tasks a year for the organization with a staff of 250 to 270 people, of course supported by competent authorities. But this is a small organization, as I mentioned before. So, I think the organization is in a good situation to tackle new challenges and has been responding very adequately to the challenges we've been facing in recent years. And that was my role as the Executive Director. I, on the given example of a specific regulation, disagreed with it.
It was not my role to speak against the regulations. The board is there to decide. I think what's important is for the Board to be fully aligned with the core legislators to fully understand where the mandates are coming from. And I think that's where I perceive there is an area we should be tackling specifically to make sure that what we produce at the end meets your objectives, what you wanted us to do in the first place. And here, I'm very committed to making this happen.
Evelyn Regner
Thank you very much. Two questions. First question, in my capacity as the rapporteur of the banking union report, what is your vision for strengthening the crisis management and deposit insurance framework? And how do you see the progress on EDIS? So, from your perspective, in your function.
So, we are very much aware that we, the European Parliament, have another task. And the second question is about the experience we have already had in the past. I would like to refer to the following situation. I'm always very critical of feminist issues, also in economic relations. And in a world where we see continuous backlashes against gender equality, I would really like to acknowledge the good work that you have done in advancing diversity, gender equality, and inclusion in the EBA.
So, we were really criticizing a lot of what has happened in the EBA, but somehow, it's also very important to point out the improvements and the work you have done in your function. So the IBA has made clear progress in embedding gender equality into its culture. And this is really something I would like to point out. And therefore, the question in this regard is: could you briefly elaborate on your past efforts and commitments to gender equality and diversity, and outline your priority in this area in your new role, as we're also aware that, Mr. Camper, a man, another man might follow you.
So, somehow, it's very important to also know what you're willing to do.
François-Louis Michaud
Thank you, first and foremost, for the kind words that you just had on this action. It's true that I took that indeed very seriously. It has also not been new. I also tried, when I was at the ECB, to pursue and advance that agenda. But indeed, as the Executive Director of the EBA had more levers to use, it worked well.
We rebalanced the management's gender composition. I did that earlier on after I joined in 2021. We completely rebalanced it. We now also worked a lot on making sure that there is a new generation of female managers being trained and groomed. We've also been advocating a lot outside.
We've been holding conferences. We've also been working with our members to raise awareness. We are also trying to link that not only to the moral need to do it, but also to the economic benefits of doing it. And there is a lot of research about that, which shows that there are economic benefits of diversity. And we've been able to connect the policy agenda of the EBA.
The fact that, for instance, we have to work on the gender pay gap and also promote better representation of female officials on the board. We've been able to connect all of that, basically advocate the topic, and make progress. So, we have also expanded a little bit beyond this agenda, working in particular on disabilities in recent years. And that's where I also see that we should make a lot of progress going forward, making sure that we can accommodate and onboard colleagues and people with different types of disabilities. So, again, that's the same logic.
We work on unconscious bias, but also on very practical solutions to make sure that they can work with us. And we think that being in the public sector, we need to be exemplary in that, and we have a lot of positive effects on the rest of society if we play it right. On CMDI specifically, I think the political agreement in June was extremely positive. There's expanded access to the GGSEs. There's also a refined public interest assessment.
There's also the depositor protection hierarchy, which is maintained. So we believe everything is in place. And going maybe one step further, I believe that crisis management should become a key target in what we do because, in these uncertain times, it is a key objective of what we practice, if I may say so. So, in crisis times or in uncertain times, as we are now, we need three things more or less. We need high buffers.
We need to make sure that banks have a high shock absorbency capacity. We also need them to project themselves, look less at the past, and do scenario analysis, stress testing, etc. And the third thing we need is crisis management capability. So, we need to rehearse, test, and facilitate exercises within the union for the financial sector to prepare for different types of shocks. There were already good examples of that.
In the Nordics, for instance, there was a large-scale exercise across several countries that we supported. We provided the IT infrastructure for them to operate. So, there are now a number of such initiatives, which is good. Of course, at some point, maybe we'll also need to see how all those things work together and ensure that it's not confusion, but really preparation. But we believe it is essential for us to navigate these uncertain times.
Aurore Lalucq
Thank you. Any catchy eyes? No? So, we have a couple of minutes to conclude.
François-Louis Michaud
Well, thank you very much for your questions and for reminding us what should also be the objectives of the EBA: finding the right balance between making the system safe, ensuring that Europe is competitive enough, and addressing the strategic challenges that it is facing. It's a delicate balance, but I think it can be done. The fact that we have those members coming from different parts of Europe, the 27 representations, and the fact that they have responsibilities in multiple areas is a big plus for the EBA. And I'm really keen to work with you on making that happen and advancing this agenda. Thank you very much.
Aurore Lalucq
No. Thank you. Thank you for being with us today and for answering all these questions. The vote on this appointment is scheduled for tomorrow and is foreseen in March. Thank you.
Thank you, Mr. Michel.
Thank you so much.
Aurore Lalucq
Can I ask the EPP adviser if Mr. Doffman is on his way or not? Do you know if he's?
Speaker 30
I know he is coming. I don't know. Maybe he will still take 3 minutes. It was at 5:30, I think, in the agenda. But for sure, he is aware of his coming.
Aurore Lalucq
Okay. So maybe we can start because the older shadows are here, and we will give the floor to Mr. Kuf. Dofman, when he can, will make it. So, consideration of the amendment on the proposal for the energy taxation directive. I will give the floor to the reporter, Mr.
Johan van Oberfeld, for 6 minutes.
Johan Van Overtveldt
Thank you, Chair, dear colleagues. First of all, I would like to express my appreciation for the commitment shown by all of you in the submission of the amendment. It is clear that there are many shared concerns: the need for greater flexibility, caution regarding key sectors and specific regional contexts, and a phased implementation that supports economic stability and investment certainty. These points fully align with the priorities I previously outlined. The Energy Taxation Directive must be an instrument that supports both the energy transition and our economic competitiveness without pricing or placing unnecessary burdens on citizens and businesses.
At the same time, the rather confrontational dynamics in the Council have once again highlighted the complexity of this issue. They reflect the tension between climate ambitions and economic realities, as well as the diversity of national priorities, ranging from competitiveness and purchasing power to, for example, geographical challenges. For all of us, I think this underlines the importance of developing a realistic, economically sound, and socially acceptable position that advances the energy transition without overburdening our businesses, households, and, also, let's not forget, the peripheral regions. Your contributions have rightly emphasized flexibility, phased implementation, and caution regarding key sectors to ensure that the proposals remain both ambitious and feasible. I fully agree that realism and balance are essential.
We can only support the energy transition while safeguarding the economic competitiveness of European businesses. This means continuing to pursue technical or technological neutrality, moving towards taxation based on energy content rather than volume, and adopting an approach that provides regulatory certainty and takes into account the pressure on households, investors, and critical sectors. At the same time, we must preserve sufficient national and sectoral flexibility to ensure that the directive remains fair and economically viable. There are some challenges in the levels of ambition reflected in the amendments: some focus strongly on social support and monitoring, while others prioritize economic pragmatism and industrial protection. It is important, I think, that we strike the right balance.
Climate ambition remains important, but it should not result in uncertainty, excessive costs, or disproportionate pressure on businesses as well as citizens. And, of course, I look forward to your further constructive contributions. Thank you.
Aurore Lalucq
Thank you, Dora. I now give the floor to Sacha Dora Porter. I will start with Mr. Dorfmann for APP for three minutes.
Yeah. Thank you very much, Sher.
Herbert Dorfmann
Unfortunately, the shadow rapporteur can't be here today from my group, so I will take over the task of speaking for him. Now, first of all, the taxation of electricity. High electricity taxes are against the goal of electrification. So, there needs to be a transitional phase of moving towards zero. Second point, on taxation of fuels: well, transitional fuels like LNG should have reductions, which are important for shipping and for goods transport.
And this, a minimum of 0%, should be valid during the transitional phase for biofuels. Moving away from carbon-based fuels is going to be a challenge. To give the transition time, I think that we should postpone the idea of a kerosene tax until four years later. We don't have sustainable aviation fuels available in sufficient quantities. So, it's only correct that we should have a longer period for implementation.
We are concerned about bureaucratic burdens, and we suggested the deletion of article 5.2. As for ETS, we have the idea of exempting ETS substances from double taxation. We also have issues involving the outermost regions, particularly the Portuguese and Spanish ones. Thank you.
Matthiasseke.
Matthias Ecke
Thank you. I'll also speak in my mother tongue. I have a few fundamental points that I'd like to make before we move to the amendments. Now we're talking about the ETD. This is basically the last part of the Green Deal package.
And I would not like to see it removed from the Green Deal context or to have the whole Green Deal fail because of it. I think, in principle, the commission is right. We need to have energy taxation, which is good for the climate, and it also needs to be consistent and ensure a consistent framework. Now we've seen this. Now, we saw this in the council, and the rapporteur has already said it.
Under the Danish presidency, it was made quite clear that this blockage runs very deep and is very difficult to overcome. This, of course, doesn't remove our responsibility to take action as a parliament. Now, the EPP colleague basically made the same point just now because, at the same time, we have parallel conversations going on, for instance, on trading. We're in a normal legislative process, and I really have a hard time seeing this. We're now talking about the ability to come to an agreement in one area, while in another area, we're unable to come to an agreement on energy taxation.
I really think that Parliament needs to take action. So far, the rapporteur has not called a shadows meeting yet, but it is my understanding that there will be an invitation forthcoming. So please, Mister Rapporteur, call a shadow meeting because we, as parliamentarians, really need to be able to say loud and clear what our position is. We need to take the initiative. The European Parliament is independent and must remain independent; it shouldn't be affected by this blockade.
Just a few comments now on our political line. First, when it comes to the reduction of the minimum taxation and the increase of the maximums, that is counterproductive in this area. Second, this automatic indexation doesn't make sense because it will be diluted over time. We really need to focus on exceptions, not just this one-size-fits-all principle. Also, we need to take into account the question of islands and outermost regions.
A very particular point for me is that even if we have a blockage in the council, we need to be able to act as a parliament. We are responsible. And if we get to the end of the path and see that the blockade continues to exist, then we need to think about other plans, like kerosene taxation and so on. But for now, at least, we have this proposal on the table, and we need to be able to negotiate on this basis. And we're willing to do that.
Thank you.
Jaroslava Pokorná Jermanová
Thank you for the floor. I will continue to check. Madam Chair, colleagues, my approach to this proposal is purely pragmatic. I understand there is a need to modernize this directive. However, I point out the possible negative impact on competitiveness, energy prices, and flexibility of the member states.
First of all, I propose that we maintain key exemptions for energy, high-energy sectors, and mineralogical processes, for example. These sectors face strong global competition, and they shouldn't face a disproportionate tax burden. Secondly, maintain possible tax exemptions for energy produced in nuclear stations, in view of the role of nuclear energy in contributing to energy stability and supply. Then, we need to have a preference for electricity for railway transport because this helps mobility. Fourth, we should reduce delegated acts to maintain the competencies of member states in the taxation area.
We should prevent sudden rises in prices. Therefore, we should postpone the application date and establish a realistic transition period. And I would like to delete the reference to vulnerable households so that member states have better flexibility when providing relief to households. The amendments are aimed at making sure that the change is more proportionate and more respectful of the powers of the member states. And I think it's also in compliance with the concerns of other committees, especially when it comes to competitiveness, connectivity, and social impact.
Thank you for your attention.
Katri Kulmuni
Thank you, Chair, dear colleagues. The aim of the proposal for the directive is to make environmental governance more efficient, improve the functioning of the internal market, and secure tax revenues. According to the commission's proposal, a minimum tax base and a certain amount would be replaced by a product. A tax based on the energy content would remove the current structure that favors fossil fuels. For example, in my country, Finland, an energy content tax has been in place since the 1990s.
The revision of the energy tax directive should be carried out in a targeted and proactive manner. The move to energy content-based taxation is a positive step forward, and the annexes need to be updated to bring the energy tax directive in line with current energy products and technological developments. So, I support the further work to promote the key environmental, internal market, and tax revenue objectives of the reform more effectively. As a detail, wood fuels should be excluded from the scope of the energy tax directive. Small-scale electricity and biogas production should be tax-free, and the use of commercial diesel should continue.
So, in my own amendments, I have described my own and my group's objectives in a more detailed way.
Aurore Lalucq
Thank you for the green, Kira Petransa, and happy birthday! I think your birthday is now on Monday?
It was Monday, but...
Thank you. Monday. Happy birthday.
Kira Marie Peter-Hansen
Right. Yes. And I'm glad to maybe get the energy taxation director a belated birthday present. And thanks to the rapporteur for...
Kira Marie Peter-Hansen
Introduction. To start off, our amendments follow the one clear principle that energy taxation must have climate objectives first. That's the aim of why we see this directive as important. That is what is guiding our amendments. So, with this in mind, we call for ending fossil fuel privileges, deleting the ten-year transition for Carrezone, removing the cargo exemption, equalizing maritime taxation with road transport, and incentivizing electrification in both sectors.
So that's one part of our amendments. And then, we also disagree with the preferential treatment for low carbon fuels or fossil and nuclear origin, and we also oppose reducing rates for agriculture and other sections. So, as you can hear, it is guided by a climate objective, less stability, or competitiveness. So, I would say, in the long term, that is also what we gain with the green transition. But I don't think there are many surprises for you in our amendments.
And then maybe just moving on to reacting to what Matthias said for us. We also think this is a good idea, as we see that there are a lot of people who want to work on this file, so we would be very open to continuing the negotiations and having shadow meetings. And I think it's also great that the commission is saying he doesn't want to give up on the file. I think we should also show that the Parliament has not given up on the file. So from the Greens' side, we are ready to start the work on compromise amendments.
Thank you.
Aurore Lalucq
Thank you. I think that there is no one on the left. Now for ESN. Any catch, say aye? No.
So, I'll give the floor back to the rapporter.
Johan Van Overtveldt
Thank you, Chair. Thank you, colleagues, for the comments. As most of you probably know, I've been working for some time on this file, which has given me quite a few headaches in terms of trying to find a compromise. In the last term, we did not succeed, and that's Mr. Eckawai.
I promise you that, of course, we will have a Shadows meeting. But my experience from the last term is that if this shadow meeting is not well prepared, then we go into the wall, as they say. And I really don't want to do that a second time. I hear, in general, that the red lines are a little bit deeper red than they were in the previous term. So that's something important in order to be able to reach compromises, which eventually we all have to make.
So, you can count on me to do that. But I will certainly call a technical meeting at short notice to discuss certain points, to be more specific. And in order to find them, there are already some, or should I say, indications of where the compromise area might be. And then I will call a shadow meeting. But I want to be honest with all of you.
I will only do that at the moment when I feel that we are really on a good, or should I say, on good working terrain, if I may use it that way. Because if I don't do it like that, then it will be, again, a waste of time. So, give me some time to prepare that well. And, like I said, at short notice, a technical meeting, and then we'll come forward with a new proposal. Thank you all.
Thank you, Chair.
Aurore Lalucq
Well, thank you all for this discussion, and good luck. So we now turn to item nine of the agenda: the presentation of the draft initiative report on the banking union and the consideration of amendments. The report was tabled on January 14 and covers the development in 2025. More than 200 amendments were tabled. The draft report and amendment cover three parts: provision, resolution, and deposit protection.
In addition, there is an introductory part of a more general nature. So, I will now give the floor to the rapporteur, Ms. Evelyn Reigner, for six minutes.
Evelyn Regner
Thank you very much. So, this is an exercise we regularly do. As you all know, and as you already said, President, we have the introductory recitals, general considerations, supervision resolution, and deposit insurance. So, this is something good in order to be comparable with the previous report. We are all looking back more or less to the hard times of 2008, when the financial crisis made us, thank God, create the institutional framework we need and, therefore, also do right now this report on the banking union.
So, we have in the introductory recitals the need to integrate climate and environmental risks into banks' balance sheet risk assessments, the potential of a digital euro to strengthen payment efficiency, and the fact that banks have recorded significant profits since 2022 following monetary tightening, leading some member states to introduce temporary solidarity levies. Concerning the general consideration, I can say that this section welcomes the progress achieved over the past decade in strengthening supervision and crisis management, especially for the swift completion of the banking union, in particular through a fully fledged EDIS, which we absolutely need. So, it emphasizes that completing both the banking union and the capital markets union is essential to support citizens, SMEs, and the real economy by fostering sustainable growth, job creation, and financial stability. In this section, I say point by point that it stresses the banking sector's role in financing the green transition and calls for stronger supervisory guidance to align banks with the European Union's climate objectives. It welcomes the programs on the digital euro as a complement to cash and as a tool for strengthening the European Union's financial sovereignty.
It raises concerns about gender imbalance in financial institutions and calls for diversity strategies and better access to finance for women-led firms. It notes improved bank profitability following the ECB rate hikes, while insisting on strict limits on dividends and bonuses for institutions receiving state aid. It calls for guidance on targeted solidarity contributions reflecting recent profits. It welcomes the creation of AMLA to strengthen anti-money laundering enforcement, and it emphasizes the importance of robust financial reporting and simplification without weakening prudential or consumer protection standards. So, I'm going through all that very quickly in order to give an overview.
In the supervision part, the additional supervisory concerns include the social and territorial impact of bank branch closures, particularly in vulnerable and rural communities, which is really an issue. The importance of smaller banks in maintaining access to services, the risks and opportunities linked to crypto assets, calling for consistent oversight, and monitoring the AI-related restructuring, safeguarding job quality, and fair working conditions. In Part Three, the resolution part, the key principles are that shareholders and creditors must bear losses first in bank failures. Partly, funds should be used only as a last resort. Adequate minimum requirements for own funds and eligible liabilities are essential for credible resolution, and banks must be able to continue essential services after resolution.
The section also welcomes the fully neutralized Single Resolution Fund and calls for full ratification of the amended European Stability Mechanism Treaty to strengthen Euro Area resilience. In Part four, on deposit assurance, the final section, I reaffirm the strong support for establishing a fully fledged European deposit insurance scheme as the third indispensable pillar of the banking union. So, this is really something that was promised and is somehow lacking behind. We absolutely should go for that. So, it welcomes the adoption of the CMDI package as a positive step that strengthens national deposit guarantee schemes and improves the legal and operational framework for moving toward common European depositor protection.
And it urges the council to advance negotiations on the Edis without delay. So, I was going through all that very quickly just now because I'm aware time is running out. We should strongly look at the geopolitical situation, and therefore, we should absolutely do everything to strengthen the single market so that it works. And therefore, somehow, we should be ambitious not only in the report but on all the issues concerning the banking union. In the shadow meetings, we have already worked on half of the issues, so we'll go on with that.
I didn't mention the amendments that have been tabled right now. It was in total 285. I'm sure my shadow rapporteur colleagues will bring them in and give an overview of what their arguments are right now. I'm very much looking forward to our next CHEDO meeting, which is quite soon, next week. So hopefully, we succeed, though, of course, having different approaches on the issues.
But I'm looking very much forward to the ongoing excellent cooperation with the shuttle raffleurs. And I hope we can do everything as planned, so that we go to the vote in the Econ Committee as foreseen. So, thank you very much.
Aurore Lalucq
Thank you, Deha Bauter. I now give the floor to Mr. Adi Pantella for IPP.
Michalis Hadjipantela
Dear colleagues, I would like to thank my colleague Evelyn Rechner for her work on the draft report and the draft compromises. As Chathor Abortator of the EPP Group, I would like to make a few remarks, also reflected in our amendments. Considering the current geopolitical context, it is essential to strengthen both the simplification and competitiveness of our banks. In this respect, we welcome references to simplification efforts. At the same time, we must safeguard the resilience of our banking sector while ensuring that European Union banks remain internationally competitive.
Regarding the implementation of the Basel III standards, while maintaining high prudential standards is essential, we must recognize that other major jurisdictions have pursued a less ambitious agenda. We therefore need to assess the impact on the international competitiveness of European Union banks and ensure they are not placed at a disadvantage. Additionally, we must avoid preemptive, ongoing legislative negotiations, including the digital Euro, EDIS, and the MICA revision. Discussions on EDIS are not finalized with a negotiating team shaping Parliament's position. It will thus be appropriate for this report to predetermine the outcome of negotiations.
Any references to Edis should remain neutral and respect the legislative process. Lastly, we need to stress that proper function and credibility of the banking union depend on full respect and effective enforcement of union consumer protection law. Credit institutions must refrain from using unfair contractual terms and practices, including in mortgage lending. Consumers, particularly borrowers, must benefit from legal certainty and effective protection, especially in cases regarding primary residences where a substantial part of the loan has already been repaid. Thank you.
Aurore Lalucq
Thank you. On behalf of Oke Gilstras, we'll give the floor to Miss Bacourna Germanova for PFC.
Jaroslava Pokorná Jermanová
Thank you for the floor. I will continue to check.
Madam Chairman, colleagues, the political group has submitted a number of constructive amendments to this banking union report. Unfortunately, at this stage, the report has not considered them. In spite of the Cordon Sanitaire, we are ready to conduct constructive dialogue. We will continue our participation in negotiations and technical meetings to achieve real democratic support. As regards the contents, we need to be open.
The report supports the introduction of a fully mutualized European insurance deposit system, but that doesn't reflect the current parliamentary arithmetic and the political situation after the election of 2024. It is true that European banks are well equipped with capital, but their vulnerabilities persist. Geopolitical risks and monetary uncertainty are necessary considerations for investment regarding competitiveness and defense, as well as the impact of the digital euro on the business basis of banks. And these obstacles cannot be overlooked. EPP Patriots and ECR have recently appealed that a more conservative language be used on a deposit insurance scheme.
As regards the digital euro, the current text drafts the future negotiations on this issue. This will be the right space to discuss it. A report on the banking union should not interfere with the legislative process on the digital euro. Our target remains the same: a pragmatic, responsible, and realistic report that will contribute towards strengthening financial stability, respecting the institutional and democratic balances within this Parliament, and the economic reality of the European banking sector.
Gilles Boyer
Yes. Thank you very much, Madam Chair. And thank you very much also to our rapporteur, Evelyn, for this draft report. It's an excellent basis for our debate. I just wanted to stress a few points that are important to me.
First of all, inside the EU, we have very different banking systems. It's worth recalling that small banks also play an important role. I mean, clearly, large banks are important for our economy's functioning, but I think that our report has to reflect the positive aspects of diversity within our banking system. As every year, we deal with the issue of transposing Basel and other international agreements. Through my amendments, I think it's important that we reflect the important work that's been done and the need to ensure that we have a fair set of rules for our own banks and those of third countries, so that we find the right balance for our own financial stability, respect for our international obligations, and financial stability in the geopolitical context.
We also need to move forward rapidly on a retail digital euro, and you can see it in the last annual report of the ECB. Our report should reflect this as well. Our parliament needs to take a new strong position on this subject at a moment when the negotiations need to move forward. We're also waiting for the report on the competitiveness of the European banking system, and we would like to see more ambition on this front. And I could say that our annual report is not necessarily the appropriate place to take positions on specific, difficult rules such as MICA.
Well, I think we'll have other opportunities to legislate on that subject. But thank you very much, and I'm looking forward to the ongoing work.
Jussi Saramo
You, Madam Chair. Dear colleagues, I would like to thank the rapporteur and chair rapporteurs for their constructive approach to this annual report. We very much welcome the fact that the report states that high capital requirements support, rather than hinder, banks' ability to support the economy. I think this is a key issue that we really stick to what we've been told many times, and we are not going to go backwards when we talk about Basel regulation or these issues. Furthermore, we are pleased that the report acknowledges that the growing explicit share of banks' risk stemming from nonbank financial intermediation is very important for us too.
So, we look forward to finalizing the report. I think we are on a very good road. And so, I want to thank you all. Thank you.
Evelyn Regner
Thank you very much, President. Thanks for all the contributions right now, but also during the negotiations. We had already, amongst the shadow rapporteurs, of course, I am very much aware that we have partly different approaches. I'm very much aware of the majorities in this house. So, somehow, of course, compromise is necessary.
Nevertheless, I think it's always good, when presenting a report, to also point out those topics which seem to me of specific importance. Everything else, of course, we will negotiate during our negotiations. To all of you, but especially to my colleague Hachi Patel, I would like to say, of course, we have to be competitive at the international level. On the other side, we have to focus on financial stability and truly European sovereignty. And it is the same explanation.
We just look at the geopolitical situation. So, we just have to have a holistic approach. It is the MICA digital euro, of course. These are issues that were negotiated in the specific negotiations. On the other side, it is important, exactly, I repeat it, with the geopolitical situation, we have to be aware that we have a quite shattered banking system situation in the European Union. And if we always say we have to wait for the other, then we just spend our legislative period waiting.
We also have to act and take responsibility, of course, always being aware of what happens in the negotiations under respective other issues that have been mentioned. And therefore, also towards my dear colleague Pokornin, it is about strengthening the European Union banking system. And strengthening doesn't mean remaining in this shattered banking system situation. So somehow, we need to take those tools and find ways to move forward. And of course, dear, I'm very much aware that we also have different banking systems when we look around.
We have the small banks. We also have the big banks. So, we have to take the whole picture into account. And I'm very much willing to take on board your considerations, and we'll do that already during the negotiations. And also to my dear colleague from the left, UC, I'm very much aware of your concerns, and I try to take them on board as much as possible, looking very much forward to the next negotiation we have.
So again, I'm aware of which sort of amendments have been submitted. But please don't let us go with this idea that we're moving with these issues at a snail's pace. So the banking union report should also be, I should say, not only something that is at the lowest level, but something ambitious. And let's do that. Thank you very much.
Thank you, dear.
Aurore Lalucq
Papa. And thank you all for the discussion. And the vote is scheduled in Econ for March 19. Thank you to all of you, and see you tomorrow.
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