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04 June 2020

Standard Weekly Newsletter


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Reactions continue to the Commission’s “Next Generation” recovery plan and the MFF budget plan. IF it all comes to pass, then as CEPS put it, a “fundamental taboo” will have been broken. EURACTIV reports that the Commission will surely follow a very different set of economic policies than the old “troika” days. So it may be a defining moment for economic policies. We could be at a corresponding moment for monetary policy.  Bruegel published a critique of the German Constitutional Court “ECB decision” by a group of leading German economists that picks many holes in the Court’s economic understanding. A Treaty revision may yet put an end to national judiciaries effectively undermining the economics of the euro – the heart of the European project.

Meanwhile, Commission/Council/Parliament are rushing to finalise the “CRR quick fix” so it can be formal law by end-June so that it is applied to 2 Q bank reporting. 210 days to go to the end of the Brexit transition and the door to further discussions remains open – just. The House of Lords pithily pointed out the Northern Irish contradiction agreed by Prime Minister Johnson – and time is running out.

 Graham Bishop

(This e-mail provides the headers of a selection of the articles published this week. If you would like to upgrade to our Gold service and  access all articles - with liive links to the underlying news - please click on the button) 

Articles 28 May 2020 - 4 June 2020 

General Financial Policy

Commissioner Gentiloni - on the Recovery and Resilience Facility : "I think that yesterday was a defining moment for the Commission, and I hope for Europe. We often repeat that crises also provide opportunities....Those who support the European project, and it is the large majority of our citizens, are asking now to seize the opportunity of Next Generation EU."
CEPS: The MFF recovery plan breaks with a fundamental taboo : Much is in line with the ‘Next Generation EU’. For the first time the EU is taking a much-needed next step towards monetary union: the ability to raise funds from the financial markets to manage asymmetric negative economic impacts in member states, backed by the Union as a whole.
EURACTIV: Commission vows to break with troika-type conditions in recovery phase : It is increasingly evident that the Commission has no intention to return to the tight cash-for-reforms system to manage the post-COVID-19 recovery and that ‘hawkish’ member states could find it difficult to turn the proposed procedure into Troika-type oversight.
Reuters: We're still a long way off concluding EU recovery fund talks: Germany : There is still a long way to go until talks on a European coronavirus recovery fund are concluded, Germany’s foreign minister said on Friday, adding that Berlin aims to act as an “honest broker” during its EU presidency this year.
Bruegel: The Independence of the Central Bank at Risk : The ruling of the German Federal Constitutional Court (GFCC) of May 5 on the ECB’s monetary policy affects not only the relation of Germany to the European Central Bank (ECB) and the Court of Justice of the European Union (ECJ) but also the constitutional foundations of monetary policy.

Banking Union

EBA issues Guidelines to address gaps in reporting data and public information in the context of COVID-19 : They are associated with the measures to deal with the COVID-19 crisis. The Guidelines are needed to ensure that the minimum necessary information is available to monitor and assess risks associated with institutions’ activities, and to strengthen transparency and market discipline.

Financial Institutions

Insurance Europe: Rushing an agreement on EC collective redress proposal will not get it right : Representatives of Europe’s business community – including Insurance Europe – have warned the Council of the EU and the European Parliament against rushing to conclude trilogue discussions on the European Commission’s collective redress proposal while many complex issues remain unresolved.

Capital Markets Union

ICMA issues report on performance of the European investment grade corporate bond markets during the COVID-19 crisis : Report documents the performance of the investment grade secondary bond market in Europe during the last weeks of February through March and April 2020, as the COVID-19 pandemic caused levels of market volatility and dislocation surpassing those seen during the global financial crisis of 2007-2008.
IOSCO encourages issuers’ fair disclosure about COVID-19 related impacts : The Board of IOSCO issued a public statement highlighting the importance to investors and other stakeholders of having timely and high-quality information about the impact of COVID-19 on issuers´ operating performance, financial position and prospects.


FT: Michel Barnier says EU remains ‘open’ to transition period extension : Talks between London and Brussels stall with sides far apart on fisheries and regulatory alignment 
House of Lords: Time running out to provide certainty for Northern Ireland, Ireland/Northern Ireland Protocol report finds : The House of Lords EU Select Committee has published its report on the Protocol on Ireland/Northern Ireland.

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© Copyright 2020 Graham Bishop

© Graham Bishop

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