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Sunday, 06.07.2025, 23:53
Economy and finances combined: Valdis Dombrovskis’ approval in European Parliament

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The former Latvian prime minister is expected to take over an
expanded portfolio with the tasks and plans of promoting the EU’s economic
interests globally, boosting “green finances” and add a social dimension to the
Union’s common financial efforts. Besides, he promised to legislate on the
Libra virtual currency backed by Facebook, acknowledged the Politico,
which has illustrated five main items in Mr. Dombrobskis’s (VD) perspective
activities.
Source: Hannah
Brenton H. and Smith-Meyer B. in:
https://www.politico.eu/article/5-takeaways-from-valdis-dombrovskis-hearing
On money laundering
Tackling money laundering is going to be a priority in the
next EU’s long-term agenda. The Commission ranked the issue high following a
series of scandals in the Eastern part of Europe during 2018-19. Thus, this July,
the Latvian government took some steps towards harmonizing anti-money
laundering rules and introducing a single watchdog as the best course of action
to tackle “dirty money” issues. These measures were the result of the Commission
study*), which found that many banks had in recent years prioritized profits
over customer checks and national supervisors were too inactive: no doubt, the
EU and the states need a better financial supervision.
Presently, about one percent of the EU’s aggregate revenues
(about € 160 billion) is involved in “suspect financial activity”.
*) More in: https://www.politico.eu/pro/europe-money-laundering-failures-signal-policy-headaches-for-new-commission/
25 July, 2019.
However, during the Parliament’s hearing, VD was more
careful: he merely spoke of the “merits” of setting up a single watchdog. Such
a cautious approach, according to experts, might stem from the fact that the EU
states’ finance ministers (being generally quite skeptic to the idea of the
EU’s “controlling role”) are going to discuss next steps to tackle laundering
soon. Making any firm commitments to MEPs before the meeting might be a mistake
if there are no unanimous intentions from the EU’s governments to active legislation.
On banking union
In analysing future VD’s work, the EU’s two flagship
policies (called “unions”) in financial services, i.e. capital markets
union and a banking union have been of a slight attention. For the perspective,
the EU economy-financial sector’s boss has shown no great ambition to introduce
the US-style capital market in which both companies and consumers can raise
money.
However, there was an idea of creating the EU-s public-private
fund to assist SMEs and medium-sized enterprises go public on capital markets,
though without any reflections on its size and composition.
As to the banking union, with the focal issues of a centralized
supervision and protecting banks from domestic debt crises, the future
Commissioner stick to the existing EU’s supervision structures and backed the vital
banking union’s structure, the European Deposit Insurance Scheme and the EU’s
efforts to reduce nonperforming loans while creating a backstop to the
eurozone's resolution fund.
On “green financing”
As soon as the general EU perspective priorities for the
next five years are supposed to be around sustainability issues, VD made clear
that this trend will be supported by the so-called “green finances”. He
stressed the importance of the EU’s plan for a Sustainable Europe Investment
Plan with about €1 trillion of green investments (!) during the next decade.
And it is about new financial sources rather than moving around with the existing
funds.
The green financing will come from a triangle: the EU
budget, the European Investment Bank (EIB) lending to combat climate change,
and the “Invest EU program” to attract private money.
Without providing an exact amount of green financing, VD
mentioned the EIB’s increasing and leading role in supporting numerous “green
projects” and generating “many tens of billions of euros.”
Among most prioritized projects, VD mentioned green-bond
standards, an EU’s Ecolabel program and “taxonomy” in defining most climate-friendly
products.
More in: Supporting
sustainability: EU’s financial innovation. In:
http://www.baltic-course.com/eng/modern_eu/?doc=147597&ins_print.
On crypto currency
In his remarks on crypto currencies and other fin-tech
products, Mr. Dombrovskis announced the Commission’s plan for a legislative
draft concerning such novelties as Libra during the next five-year term. It is
known that Facebook plans to launch Libra in 2020, together with tens of other
companies, including MasterCard and Visa.
More on Libra in:
Libra- a new global digital currency. In:
http://www.baltic-course.com/eng/modern_eu/?doc=150171&ins_print
“Europe needs a common approach on crypto assets, such as
Libra; I intend to propose new legislation on this. We'll need to regulate
Libra to supervise it on EU level both from the point of financial stability
and the protection of investors as well”, he said, also highlighting its risks
to competition and cybersecurity.
He suggested this could be done with a new “regulatory
framework” for Libra's intended type of virtual money, so-called “stable-coins”,
linked to conventional currencies, rather than just updating existing rules.
Social agenda
The EU’s social agenda includes policies to create a highly
competitive “social market economy” in the member states. Existing EU-2020
Strategy aims at providing more and better jobs, promote skills and
entrepreneurship, improve the functioning of the labour markets, confronting
poverty and social exclusion, modernising social protection systems including
pensions, health and long-term care, facilitate the free movement of workers, etc.
More in: https://ec.europa.eu/info/sites/info/files/mission_statement_2.pdf
Protecting workers in the member states in a changing global
economy and during the transition to circular and sustainable patterns were the
priority issue in the VD’s “social agenda”.
Latvia’s Commissioner pledged to introduce a minimum wage at
EU-level as one of his legislative priorities with a reinsurance program for
cash-strapped countries to fund jobless benefits. Such “reinsurance proposal”
is supposed to protect workers in tough times and secure stable workforce as a
shock absorber for countries that experience sudden economic problems.
However, MEPs from the Parliament’s socialists and democrats’
block requested more active and goal-oriented social policies, including measures
in social housing, collective bargaining and combating income inequality.
Several proposals were voiced for a more ambitious EU’s
social agenda, as well as delivering on already approved EU-2020 strategy
suggestions.