Europe must speed up its green and digital transition. For that, we need to complete the Capital Markets Union to provide effective financing. This is the plea made by the five Presidents of the ECB, EIB, European Council, European Commission and Eurogroup in a joint post

The European Union is determined to fast-forward its green and digital transition. What we decide today will affect the generations to come. It is our collective responsibility to get it right. Creating net-zero industries, boosting technological competitiveness, and diversifying supply chains will be paramount for Europe’s continued prosperity and strategic sovereignty in the coming decades.
The financing needs are huge, and the lion’s share will need to come from private capital. The role of public investment is to give policy direction and to incentivise massive crowding-in of private capital, including through, but not limited to, the involvement of the European Investment Bank Group and national promotional banks.
We have been too slow on the Capital Markets Union
The Single Market has underpinned Europe’s prosperity since its creation 30 years ago by eliminating obstacles to trade within the EU and attracting foreign investment. And the Economic and Monetary Union has been a further driver of market integration. But we have been too slow for too long on one essential building block: the Capital Markets Union.
Right now, banks in Europe provide the bulk of investment funding. They alone, however, cannot help the EU win the global investment race, especially in comparison with the United States. Bank loans account for 75% of corporate borrowing in the EU and bond markets for 25% – while the inverse is true in the United States.
Our start-ups and scale-ups are looking for capital. Businesses, especially SMEs, are struggling to find the patient and risk-bearing funding they need to invest in the green and digital transition. For example, the EU’s stock market capitalisation is less than half that of the United States, in percentage of GDP, and lower than that of Japan, China and the United Kingdom. Yet, Europeans save much more than Americans.
It is our responsibility to make sure that European companies have the financing opportunities they seek, here, in the EU. We need a Capital Markets Union that channels Europe’s vast savings into tomorrow’s engines of growth. We must overcome the current patchwork of national frameworks, and in some cases underdeveloped capital markets, to unlock their full potential. This will strengthen the EU as an investment destination and make the euro an even more attractive currency.
The EU has already taken some decisive steps in creating a Single Market for capital. Still, we need to step up our efforts and our ambitions to remove remaining barriers to cross-border finance and allow for deeper harmonisation. This includes more aligned insolvency laws, more easily accessible financial information, simplified access to capital markets, particularly for smaller companies, robust market infrastructures, and more-integrated capital markets supervision.
Deepening the Capital Markets Union requires a collective effort, involving policymakers and market participants across the EU. It needs strong political will and ownership at all levels of government. It needs the European Parliament and the Member States in the Council to urgently finalise negotiations on key legislative texts. It requires courage and openness to change. We are determined to see progress going through.
Time is of the essence. We have made notable progress toward Europe’s financial integration in the past two decades, but it is time to show greater ambition. A genuine Capital Markets Union is within reach. The coming decades will see the greatest industrial transformation of our times. Our long-term competitiveness will depend on it. Let’s make sure we have the capital to make it happen.
This ECB Blog post appeared as an opinion piece in various newspapers and on websites across Europe.
Authors:

Paschal Donohoe, President of the Eurogroup

Werner Hoyer, President of the European Investment Bank

Christine Lagarde, President of the European Central Bank

Charles Michel, President of the European Council

Ursula von der Leyen, President of the European Commission

Compliments of the European Central Bank.
The post ECB | Channelling Europe’s savings into growth first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Introductory remarks by Fabio Panetta, Member of the Executive Board of the ECB, at the meeting of the Euro Cyber Resilience Board for pan-European Financial Infrastructures | Frankfurt am Main, 8 March 2023 |
The proliferation of cyber threat actors combined with an increase in remote working and greater digital interconnectedness is raising the risk, frequency and severity of cyberattacks.[1] Increasingly, cyber criminals are launching ransomware attacks and demanding payment in crypto. Cyberattacks related to geopolitical developments – Russia’s aggression against Ukraine in particular – have also become a more common feature of the cyber-threat landscape.
The Euro Cyber Resilience Board for pan-European Financial Infrastructures (ECRB) has played a key role in protecting the security and integrity of the financial system from these threats. The last three years have shown that we can work under adverse conditions towards a common goal. Our financial infrastructures have proven their resilience to cyber threats. But this does not mean we can become complacent or any less vigilant in the face of cyber threats. We simply cannot afford to fall behind the curve: cybersecurity must be the backbone of digital finance.
Today I will take stock of the ECRB’s work. I will then discuss current cyber threats and emerging risks before outlining the implications for our work in the future.
The contribution of the Euro Cyber Resilience Board
The ECRB brings together private and public stakeholders across pan-European financial infrastructures, critical service providers, central banks and other authorities. This offers a unique prism through which the ECRB can identify and fix any weaknesses which cyberattacks could potentially exploit in order to propagate, which in turn would cause systemic ripples throughout the European financial ecosystem.
Let me give three examples of why the ECRB is such a useful forum for cooperation.
First, in the area of information sharing, the ECRB’s Cyber Information and Intelligence Sharing Initiative (CIISI-EU)[2] allows members to exchange information about cyber threats and mitigation in a secure and trusted group environment.
Second, the ECRB has established a crisis coordination protocol that facilitates cooperation and coordination, allowing members to exchange and respond to major cyber threats and incidents.
Third, in the area of training and awareness, the ECRB conducts joint assessments and training sessions to increase common knowledge and understanding. A key pillar of the ECB’s cyber strategy for financial infrastructures is the TIBER-EU framework for threat-led penetration testing, also known as red teaming. In June 2022 the ECRB organised a dedicated roundtable on TIBER-EU where members shared their experience of these kinds of exercises.[3]
In view of their systemic role in the financial system, we will continue to focus on pan-European financial infrastructures. Nonetheless, financial infrastructures are increasingly interdependent through horizontal and vertical links and common participants. They are also reliant on information and communication technology and on third-party service providers. As a result, these infrastructures are exposed to common risks and vulnerabilities through which cyberattacks could propagate swiftly if they are not rigorously managed. The ECRB allows us to join forces to address these risks on a sector-wide level.
Adapting to a constantly changing cyber threat landscape
Let me now turn to the cyber threat landscape.
Threats are becoming increasingly complex. Recent attacks call for constant vigilance at an operational level, and the continuous reassessment of regulatory and oversight frameworks to see whether they need to be updated.[4] Significant but unpredictable shifts can occur at any time. We must therefore be prepared to understand them and to adapt quickly in order to mitigate the financial ecosystem’s susceptibility to cyberattacks.
The ECRB has identified supply chain attacks and ransomware as key threats in the current environment, and artificial intelligence (AI) as an emerging threat. We have also witnessed how geopolitical developments, most recently Russia’s aggression against Ukraine, have weaponised cyberspace. The most prominent examples are distributed denial-of-service (DDoS) attacks against government and financial entities.[5]
Let me discuss the key current and emerging threats in more detail.
Supply chain attacks
The financial ecosystem’s reliance on third-party products and services is a key risk, especially when financial entities outsource critical functions to them. An attack on these third parties or on their products and services can disrupt and harm the financial infrastructures that rely on them, with spillovers to interconnected entities.
When such third-party products and services are widely used in the financial ecosystem, a cyberattack can have widespread, possibly systemic effects by having an impact on multiple financial entities at once. That is why cyber threat actors target these third parties. In so doing, they can compromise numerous financial entities simultaneously.
The recent cyberattack on the third-party provider ION Cleared Derivatives shows how an attack on one software provider may cascade onto their clients. In this specific case, the disruptions to the trading and clearing of financial derivatives remained limited, but we cannot ignore scenarios where the attacks could have propagated quickly, disrupting the financial system.
This case signalled the need for financial entities to review their third-party providers, the providers of these third-parties, their cyber resilience levels and the systemic impact that may ensue from a cyberattack on any of these providers. In particular, it is vital to assess critical service dependencies on third-party products and services which could be disrupted or even terminated as a result of a cyberattack. Mitigating measures need to be put in place.
Against this background, the G7 recently updated its Fundamental Elements for Third-Party Cyber Risk Management in the Financial Sector[6]. In addition, the ECRB set up a working group in 2022 to support third-party cyber risk management.
We must have a cyber resilience mindset at all times. The question we must ask is not if a cyberattack will happen, but whether we are ready to respond when it happens. Over the past year, the ECRB has worked on a conceptual model for how the financial infrastructure ecosystem could manage such a crisis if it occurred. It has also developed protocols and networks aimed at supporting a collective, consistent and comprehensive response to a cyber crisis by stakeholders.
Ransomware
The proliferation of ransomware is one of the most significant challenges currently facing financial entities. Not only may ransomware attacks result in financial loss, they may also severely disrupt operations. Even after a ransom is paid, there is no guarantee the decryption key will actually work or that the stolen data will not be publicly disclosed or further misused to extort victims’ customers, for example.
Ransomware attacks are growing more sophisticated and damaging, which in turn may enable ransomware threat actors to obtain even more resources. 2022 was one of the most active years for ransomware activity.[7] However, it was also the first year that the majority of victims of ransomware attacks decided not to pay up[8], which indicates that the approach towards ransomware attacks is changing.
Authorities globally are stepping up their efforts to counter ransomware. For instance, the G7 issued Fundamental Principles on Ransomware Resilience in October 2022[9].
We need to tackle ransomware attacks from various angles.
First, every firm must be ready to repel ransomware attacks, either through the use of proper cyber hygiene practices or by ensuring that data is backed up regularly and is kept up-to-date and tamper-proof.
Second, enforcement agencies need to conduct forensic analyses, locate attackers and join forces to prosecute them.
Third, crypto-assets – especially unbacked crypto-assets, which are used to make ransomware payments owing to the anonymity and money laundering possibilities they offer[10] – need to be strictly regulated.[11] Similarly, crypto-asset transfers must be traceable.
The proposed EU Regulation for Markets in Crypto-Assets (MiCA) and revision to the Regulation on information accompanying transfers of funds, which extends the “travel rule”[12] to crypto-assets, are important steps. However, to be effective and prevent regulatory arbitrage, regulation must be stepped up globally.[13] Implementation of the Financial Action Task Force (FATF) guidance for crypto-assets and its enforcement at international level are therefore crucial.[14]
In addition, all firms need to have the highest level of cyber controls in place to prevent attacks from being successful and to detect and recover from ransomware attacks. Moreover, insurance firms can lend their support by obtaining assurances from their clients that they have high-level cyber resilience plans in place before providing cyber risk insurance policies, thus ensuring that these very same policies do not lower firms’ incentives to prepare for cyberattacks.
Artificial Intelligence (AI)
Even if we do not realise it, the use of artificial intelligence (AI) is already widespread. We use AI every day, including on our phones, in our homes and at the workplace. And firms use it to harness big data.
AI can help to strengthen cybersecurity, for instance, by improving the detection of highly sophisticated cyberattacks through its ability to identify abnormal system behaviour compared with an established baseline. This is the kind of potential that we need to leverage.
But AI can also multiply cyber risks by, for instance, helping malicious individuals, even those who have limited or no technical skills, draft very convincing phishing emails or identify topics that will achieve the maximum engagement from those being targeted. To make matters worse, AI can even create and fix code that can be used to exploit and compromise the endpoint.[15] This opens up new possibilities for malicious individuals to use AI to launch cyberattacks. Although AI development firms try to install safeguards to prevent its unethical use, they can be circumvented.
The risks from AI need to be clearly understood and addressed through regulation and oversight. By exchanging information among its members and organising roundtables and training, the ECRB is in a strong position to raise awareness of risks at an early stage and accumulate knowledge of these types of threats. For its part, the European Commission has proposed a Regulation on artificial intelligence that aims to address some of the key risks associated with AI.[16]

Chart 1
Cyber threat landscape for financial market infrastructures in Europe

Note: Threats are arranged in descending order of estimated severity.

Conclusion
As we realised some years ago, cyber threats are here to stay. Many highly-adaptable threat actors exist who will systematically try to exploit any weakness or vulnerability for illegal purposes. Existing threats are becoming more dangerous and new threats are on the horizon. We therefore need to adapt our operational and cyber resilience frameworks constantly at the individual level as well as collectively through strict regulation, enforcement and prosecution. Future cooperation between public and private institutions will also be crucial. The ECRB can make a decisive contribution to this effort in relation to the financial system.
Compliments of the European Central Bank.

Footnotes:
1. See Forbes (2022), “The Pandemic’s Lasting Effects: Are Cyber Attacks One of Them?”, 20 July.
2. See European Central Bank (2020), “Cyber Information and Intelligence Sharing Initiative (CIISI-EU). Cyber information and intelligence sharing: a practical example”.
3. See European Central Bank (2022), ”Key takeaways from the ECRB roundtable on red teaming (TIBER-EU)”.
4. See Financial Times (2023), “The financial system is alarmingly vulnerable to cyber attack”, 6 February.
5. See Reuters (2023), “Russian ‘hacktivists’ briefly knock German websites offline”, 25 January.
6. See “G7 Fundamental Elements for Third-Party Cyber Risk Management in the Financial Sector”, October 2022.
7. See Techcrunch (2022), “Ransomware is a global problem that needs a global solution”, November.
8. See Security Week (2023), “Ransomware revenue plunged in 2022 as more victims refuse to pay up”, January.
9. See “G7 Fundamental Elements of Ransomware Resilience for the Financial Sector”, October 2022.
10. According to recent reports, ransomware attackers extorted at least €430 million in 2022, while the number of ransomware strains saw a sharp increase. The actual amount extorted may be even higher, as may the number of attacks. See “The 2023 Crypto Crime Report”, Chainalysis, February 2023.
11. See Panetta, F. (2022), “Crypto dominos: the bursting crypto bubbles and the destiny of digital finance”, keynote speech at the Insight Summit held at the London Business School, 7 December.
12. The “travel rule” requires that information on the source of the asset and its beneficiary travels with the transaction and is stored on both sides of the transfer. See European Parliament (2022), “Crypto-assets: deal on new rules to stop illicit flows in the EU”, 29 June.
13. See Panetta, F. (2023), “Caveat emptor does not apply to crypto”, Financial Times, 4 January.
14. See Financial Action Task Force (2021), ”Updated Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers”, October.
15. See Forbes (2023), “Does ChatGPT pose a cybersecurity threat? Here’s the AI bot’s answer”, February.
16. See European Commission, “Regulatory framework proposal on artificial intelligence”. The proposed rules will address risks specifically created by AI applications, propose a list of high-risk applications, set clear requirements for AI systems for high-risk applications, define specific obligations for AI users and providers of high-risk applications, propose a conformity assessment before the AI system is put into service or placed on the market, propose enforcement after such an AI system is placed in the market, and propose a governance structure at European and national level.
The post ECB Speech | The Quick and the Dead: building up cyber resilience in the financial sector first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

On 7 March 2023, the European Commission carried out unannounced inspections at the premises of companies and an association active in the fragrance industry in various Member States. In parallel, the Commission has sent out formal requests for information to several companies active in the same sector.
The inspections and requests for information concern possible collusion in relation to the supply of fragrances and fragrance ingredients. Fragrances are used in the manufacture of consumer products such as household and personal care products.
The Commission has concerns that companies and an association in the fragrance industry worldwide may have violated EU antitrust rules that prohibit cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union).
The Commission has been in contact with the Antitrust Division of the US Department of Justice, the UK Competition and Markets Authority and the Swiss Competition Commission in relation to this matter and the inspections were conducted in consultation with them. The Commission officials were accompanied by their counterparts from the national competition authorities of the Member States where the inspections were carried out.
Unannounced inspections are a preliminary investigatory step into suspected anticompetitive practices. The fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself. The Commission respects the rights of defence, in particular the right of companies to be heard in antitrust proceedings.
There is no legal deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of defence.
Under the Commission’s leniency programme companies that have been involved in a secret cartel may be granted immunity from fines or significant reductions in fines in return for reporting the conduct and cooperating with the Commission throughout its investigation. Individuals and companies can report cartel or other anti-competitive behaviour on an anonymous basis through the Commission’s whistle-blower tool. Further information on the Commission’s leniency programme and whistle-blower tool is available on DG Competition’s website.
Compliments of the European Commission.
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Under the Digital Services Act (DSA), the Commission is empowered to impose a fee on providers under its supervision, which is expected to be levied for the first time in autumn 2023.  The Commission has now set the detailed rules and procedures for such supervisory fees to be levied.
The delegated regulation aims to provide legal certainty to the service providers designated as Very Large Online Platforms (VLOPs) or Very Large Online Search Engines (VLOSEs) under the DSA. It specifies the methodology and procedures to calculate and levy the supervisory fee, provides further details on the calculation of the overall estimated costs to be covered with the levied fees and on the determination of the individual fees.
The DSA entered into force on 16 November 2022. The obligations for service providers designated as VLOPs or VLOSEs will become applicable four months after their formal designation in accordance with the DSA.
The delegated regulation proposed today follows a public consultation on the draft which took place between 22 December 2022 and 19 January 2023.
Following today’s adoption, the delegated act will now be transmitted to the European Parliament and the Council, which have 3 months to scrutinise it. At their request, the scrutiny period can be extended by 3 months.
More information

Delegated regulation
Digital Services Act package

Compliments of the European Commission.
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Following a dialogue with EU consumer protection authorities and the European Commission (CPC network), WhatsApp committed to being more transparent on changes to its terms of service. Moreover, the company will make it easier for users to reject updates when they disagree with them, and will clearly explain when such rejection leads the user to no longer be able to use WhatsApp’s services. Also, WhatsApp confirmed that users’ personal data are not shared with third-parties or other Meta companies – including Facebook – for advertising purposes. The dialogue was coordinated by the Swedish Consumer Agency and the Irish Competition and Consumer Protection Commission and facilitated by the Commission.
Commissioner for Justice, Didier Reynders, said: “I welcome WhatsApp’s commitments to changing its practices to comply with EU rules, actively informing users of any changes to their contract, and respecting their choices instead of asking them each time they open the app. Consumers have a right to understand what they agree to and what that choice entails concretely, so that they can decide whether they want to continue using the platform.”
The CPC Network first sent a letter to WhatsApp in January 2022, following an alert by the European Consumer Organisation (BEUC) and eight of its member associations on alleged unfair practices in the context of WhatsApp’s updates to their terms of service and privacy policy. In June 2022, the CPC Network sent a second letter to WhatsApp reiterating their request that consumers must be clearly informed about WhatsApp’s business model and, in particular, whether WhatsApp derives revenues from commercial policies relating to users’ personal data. Following discussions among the CPC Network, the Commission and WhatsApp, the company confirmed that it does not share users’ personal data for advertising purposes.
Overview of commitments
For any future policy updates, WhatsApp will:

 explain what changes it intends to make to the users’ contracts and how they could affect their rights;
include the possibility to reject updated terms of service as prominently as the possibility to accept them;
ensure that the notifications informing about the updates can be dismissed or the review of the updates can be delayed, as well as respect users’ choices and refrain from sending recurring notifications.

Next steps
The Consumer Protection Cooperation Network (CPC) will actively monitor how WhatsApp implements these commitments when making any future updates to its policies and, where necessary, enforce compliance – including by the possibility of imposing fines.
Moreover, a recent Commission study and the last CPC sweep on “dark patterns” showed that many companies use “dark patterns”, for example making it more difficult to unsubscribe from a service than to subscribe to it. The CPC Network, with the support of   the Commission, will continue to intensify their efforts to addres such illegal practices where they occur.
Background
The new Digital Services Act foresees i.a. an obligation for services to have clear terms and conditions, explaining to the user in comprehensible language when their content or their account can be affected by certain restrictions, and an obligation to apply such restrictions in a diligent, objective and proportionate manner. The DSA will complement rules such as the Unfair Commercial Practices Directive or the General Data Protection Regulation, ensuring that no regulatory gap is left for platforms to manipulate users.
The Consumer Protection Cooperation (CPC) is a network of authorities responsible for the enforcement of EU consumer protection laws. To tackle cross-border issues, their actions are coordinated at EU level.
National authorities are responsible for the enforcement of EU consumer protection laws. Thanks to the  Consumer Protection Cooperation Regulation, they  have a common toolbox of strong powers to detect irregularities and take speedy and coordinated action against non-compliant traders.
Moreover, the new Directive on better enforcement and modernisation of Union consumer protection rules, amended existing EU consumer law instruments by further enhancing transparency for consumers when they buy on online marketplaces.
Cooperation applies to consumer rules covering various areas such as unfair commercial practices, e-commerce, geo-blocking, package holidays, online selling, and passenger rights.
Compliments of the European Commission.
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The word “recyclable” shows up in a lot of environmental claims for consumer products, but what do people understand the term to mean? Does that perception reflect the current state of recycling practices? And have there been changes in perception or practices that might suggest updates to the FTC’s Green Guides? Those are some of the topics on the table at Talking Trash at the FTC: Recyclable Claims and the Green Guides, a half-day workshop scheduled for May 23, 2023.
The FTC announced the workshop as part of the ongoing review of its Guides for the Use of Environmental Marketing Claims. Panelists will discuss the kinds of “recyclable” claims consumers are seeing in the marketplace, including new representations that may have emerged since the FTC’s last review of the Green Guides in 2012; what research shows about how people perceive those claims; and the current state of recycling practices.
The workshop is set for Tuesday, May 23rd, from 8:30 AM to 12:30 PM at the FTC’s Constitution Center conference room in Washington, DC. You can attend in person or follow the webcast online. Watch this space for more information about the agenda.
You’re also invited to file public comments on the subject of “recyclable” by June 13, 2023. The Federal Register Notice includes details about how to file online.
Compliments of the Federal Trade Commission.
The post Next step in FTC’s Green Guides review: A closer look at “recyclable” claims first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Today, the European Commission and the Government of the United Kingdom reached a political agreement in principle on the Windsor Framework. This constitutes a comprehensive set of joint solutions aimed at addressing, in a definitive way, the practical challenges faced by citizens and businesses in Northern Ireland, thereby providing them with lasting certainty and predictability.
The joint solutions cover, amongst other things, new arrangements on customs, agri-food, medicines, VAT and excise, as well as specific instruments designed to ensure that the voices of the people of Northern Ireland are better heard on specific issues particularly relevant to the communities there. These new arrangements are underpinned by robust safeguards to ensure the integrity of the EU’s Single Market, to which Northern Ireland has a unique access.
Today’s political agreement in principle allows the two sides to open a new chapter in our partnership, based on mutual trust and full cooperation, also allowing to unlock the full potential of their relationship.
President Ursula von der Leyen said: “The Windsor Framework was made possible by genuine political will and hard work guided by the fundamental principle that the interests and needs of people should always come first. Supporting and protecting the hard-earned gains of the Good Friday (Belfast) Agreement was the prerequisite of our endeavour. Today, our achievement allows us to put forward definitive solutions that work for people and businesses in Northern Ireland and that protect our Single Market. It also allows us to turn the page towards a bilateral relationship that mirrors the one of close allies standing shoulder to shoulder in times of crisis.”
The joint solutions, found within the framework of the Withdrawal Agreement, are based on the following starting points:

A comprehensive, cross-cutting and definitive solution, addressing practical difficulties in the operation of the Protocol;
A balance between flexibilities for the movement of goods for end use in Northern Ireland and effective safeguards guaranteeing the protection of the EU’s Single Market;
A clear distinction between goods at risk and goods not at risk of entering the EU’s Single Market.

In the sanitary and phyto-sanitary (SPS) area, the joint solutions ensure that the same food will be available on supermarket shelves in Northern Ireland as in the rest of the UK. In practice, agri-food retail products for end consumption in Northern Ireland will be able to move from Great Britain with minimal certification requirements and controls. UK public health standards will apply for those agri-food retail goods for end consumption in Northern Ireland, whilst EU plant and animal health rules remain applicable for the protection of the EU Single Market. This arrangement is commensurate with a set of existing and new safeguards, including SPS inspection facilities and labelling which will be introduced gradually. When these safeguards are fully in place, identity checks will be reduced to only 5%. Physical checks will follow a risk-based and intelligence-led approach. Moreover, travelling with pets will be easy, thanks to a simple pet travel document, a microchip, and a declaration by the owner that the pet will not travel to the EU.
New arrangements in the area of customs are based on an expanded trusted trader scheme that will also be open to businesses in Great Britain. Goods moved by trusted traders and not at risk of entering the EU’s Single Market will benefit from dramatically simplified procedures and drastically simplified declarations with reduced data requirements. Substantial facilitations were found for freight and the movement of all types of parcels, i.e., business-to-business, business-to-consumer, and consumer-to-consumer, with consumer-to-consumer parcels being entirely exempt from the main customs requirements. These new solutions are made possible especially by new data-sharing arrangements allowing for risk assessments, which would constitute the principle basis for controls. Robust authorisation and monitoring of the trusted trader scheme, and increased market surveillance and enforcement by UK authorities also act as safeguards. Full customs procedures will apply to goods at risk of entering the EU’s Single Market.
A permanent solution has also been found to ensure that people in Northern Ireland have access to all medicines, including novel medicines, at the same time and under the same conditions as people in the rest of the UK. This complements the solution the EU adopted in April 2022 for the supply of generic medicines to Northern Ireland. These new arrangements are made possible by new safeguards, notably labelling, designed to ensure that the medicines do not enter the EU’s Single Market.
New flexibilities were also found for certain VAT and excise rules, accompanied by safeguards protecting the EU from fraud risks or potential distortion of competition. These arrangements include a possibility to set UK VAT rates below EU VAT minima rates for immovable goods with no risk that these goods enter the EU Single Market (e.g., a heat pump for a house). A UK SME VAT exemption scheme is now applicable to both goods and services if the UK respects the EU threshold for the size of SMEs. There is now also a possibility to tax all alcoholic beverages according to their alcoholic strength, and to set reduced duty rates to alcoholic beverages, if served for immediate consumption in hospitality venues in Northern Ireland, as long as the applied rates are not below EU minima duty rates.
With regard to governance, the voices of Northern Ireland people and stakeholders will be better heard through regular engagement at each level of the Withdrawal Agreement structures. There will be enhanced engagement with Northern Ireland stakeholders on Protocol-related matters. New thematic subgroups within the Joint Consultative Working Group will be set up. A new emergency mechanism, the Stormont Brake, will allow the UK government, at the request of 30 Members of the Legislative Assembly in Northern Ireland, to stop the application in Northern Ireland of amended or replacing provisions of Protocol-related EU law that may have a significant and lasting impact specific to the everyday lives of communities there. This mechanism would be triggered under the most exceptional circumstances and as a matter of last resort, in a very well-defined process set out in a Unilateral Declaration by the UK.
The Court of Justice of the European Union remains the sole and ultimate arbiter of EU law.
The joint solutions also address implementation difficulties related to tariff rate quotas (TRQs) for the most sensitive categories of steel and clarify the application of State aid rules.
These new arrangements have been carried out within the framework of the Withdrawal Agreement of which the Protocol on Ireland/Northern Ireland is an integral part. Within these pre-established legal parameters, a number of targeted amendments to the Protocol address, in a definitive way, unforeseen circumstances or deficiencies that have emerged since the start of the Protocol.
Next steps
The European Commission and the Government of the United Kingdom will proceed, within the remit of their respective powers, with the necessary steps to translate the joint solutions into legally binding instruments and to implement these swiftly and in good faith. To that effect, a meeting of the EU-UK Joint Committee on the Withdrawal Agreement, co-chaired by Vice-President Maroš Šefčovič and UK Foreign Secretary James Cleverly, will also take place in the coming weeks. The Commission has today made proposals to the Council for a Union position as regards, amongst other things, the decisions that need to be adopted in that meeting.
In addition, the Commission has today tabled legislative proposals in the SPS, medicines and TRQs areas, which will now be submitted to the European Parliament and Council.
The respective roles of the European Parliament and Council will be fully respected.
The new arrangements are not compatible with the Northern Ireland Protocol Bill. The Commission welcomes that the UK government is stopping the process of the Northern Ireland Protocol Bill, and is not proceeding with it, so that it will fall in the UK Parliament at the end of the Parliamentary session. These arrangements, when implemented, mean that there will no longer be grounds for the existing Commission legal proceedings against the United Kingdom relating to the Protocol on Ireland / Northern Ireland.
Background
The Protocol on Ireland/Northern Ireland, as an integral part of the Withdrawal Agreement, was agreed jointly and ratified by both the EU and the UK. It has been in force since 1 February 2020 and has legal effects under international law. The aim of the Protocol is to protect the Good Friday (Belfast) Agreement in all its dimensions, maintaining peace and stability in Northern Ireland, avoiding a hard border on the island of Ireland, while preserving the integrity of the EU Single Market.
Compliments of the European Commission.
The post A new way forward on the Protocol on Ireland/Northern Ireland: political agreement in principle on the Windsor Framework first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

This week we marked one year of Russia’s aggression against Ukraine. At the UN, an overwhelming majority of 141 members voted for a just peace for Ukraine. With only 7 countries voting against, it showed, once more, how isolated Russia is. In a briefing to the Security Council, I also underlined the EU’s track record of promoting peace not just in Ukraine but around the world. Many countries look to the EU as a reliable partner with strong multilateral credentials. But they want reassurance that we will stay engaged on the full range of global challenges.

“With an overwhelming majority of 141 countries voting for a just peace for Ukraine and only 7 voting against, the United Nations General Assembly showed, once more, how isolated Russia is.”

Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission

The United Nations was the nerve centre of global diplomacy this week, with many Foreign Ministers in New York. The main purpose was to discuss and vote on a resolution in the General Assembly that put the spotlight on who is responsible for the war against Ukraine as well as setting out the principles for a just peace.
On Wednesday at an emergency session of the General Assembly, Ukraine tabled the text and I spoke on behalf of EU member states. I stressed that the war was not ‘a European issue’, but affected core global principles like sovereignty, territorial integrity and the right for countries to live in freedom and security. Everyone would be less safe in a world where the illegal use of force would somehow be normalised.
“It is clear that the world wants peace and that Ukrainians deserve peace. But not just any peace”, I said, “we want a just peace, based on international law and respect for the UN Charter”. Supporting Ukraine and searching for peace go together. It is not either or, but both end.
The next day, the resolution was put to a vote. This was a key moment for every UN member to take a stand and be counted. Frankly speaking, there was a lot of speculation whether we would be able to reach a similar level of support as previous Ukraine-related UNGA resolutions (in February 2022 condemning the aggression and in October 2022 on the illegal annexations). These had passed with majorities of 141 and 143 respectively. Was there ‘Ukraine-fatigue’ and resentment over ‘double standards’ among the so-called Global South, as some argued? Would Russia be able to peel away support with its disinformation campaigns? In the end, the result was impressive: 141 vs 7 with 32 abstentions. Russia was only supported by Belarus, DPRK, Eritrea, Mali, Nicaragua and Syria, which is quite a remarkable club…
The outcome was a resounding success, sending a clear message that the world wants the war to stop – and to stop now. It was a vote for a just peace in Ukraine and for upholding international principles against Russia’s systematic attacks. It was also a success for EU diplomacy: we played a key role in New York but also doing outreach around the world, with good coordination among member-states. At the stake out to the press after the vote, I was glad to be joined by the many EU Foreign Ministers present in New York: showing this was collective success of ‘Team Europe’.
The next day, which marked exactly one year since the start of the war, there was a special session in the Security Council, again with many ministers present. Secretary General Guterres opened and he did not mince his words, making clear that Russia’s invasion was illegal and a direct breach of the UN Charter. He recounted the horrible costs this war entails, for Ukrainians first, but also for the wider world, through rising prices for food, energy and fertilisers. He recalled the clear call for a just peace as enshrined in the UNGA resolution passed the day before.
Ukrainian Foreign Minister Kuleba reminded everyone of the Russian lies that had preceded the invasion and the horrors that followed. He underlined that how and why Ukraine had resisted and would continue to do so, with the support of all its partners. Ukraine’s victory would also mean the victory of international law, the UN Charter and the principles it contains. He called for a minute of silence to mark the victims in Ukraine. Everyone stood up, apart from the Russian delegation. They said they would only agree to a commemoration of all victims – and only then did they join the rest of the audience in marking their respect.
After that, 13 members of the Security Council echoed many of the points made by the SG, with understandable nuances. Russia for its part launched yet another diatribe, mixing baseless accusations with historical fabrications. It only showed, once again, how the Russian leadership is living in a parallel universe. China introduced its ‘position paper’ on a political settlement. It is not really a peace plan and mostly reiterates well-known Chinese positions, some of which we share while important ones are missing. Of course, we will analyse it, but it is already clear that the key problem is that it does not really distinguish aggressor from the victim, putting the parties at an equal level.
From my side I underlined two points: why Russia’s war of choice matters to all of us and how we should get to peace, building on the UNGA resolution and President Zelensky’s peace plan. I also reiterated that the EU is committed to uphold international law everywhere and that we would continue our global engagement to reduce suffering and work for peace around the world.
The broader picture
These three days in New York confirmed the old saying that the UN is a pretty good mirror of the state of the world. If we look beyond Ukraine, it is clear that global crises are accumulating but the global response is either blocked or inadequate. Leadership and unity are lacking. The Russian war and tensions between China and the US are tearing at the fabric of what we often refer to as the “rules-based international order”.
But equally, a vast major of countries still look to the UN to provide solutions. Like us, they are keen to see multilateral action. Many of them see potential in a stronger role for the EU. They see us as a preferred partner, be it as a counterbalance to China or a more reliable and consistent partner than the US. They see us as more faithful to international norms and the multilateral system and more mindful of the interests of the developing world.
Many also see an international system that they regard as outdated, paralysed and unequal. They want more action on climate finance, reform of the multilateral development banks to leverage more risk and more effective debt relief and restructuring and a better African representation in global decision-making including the G-20, Security Council and in the Bretton Woods institutions. Many are looking to the EU to help deliver at least on some of this long list. The urgency with which we addressed the pandemic or the war in Ukraine is seen by many as an example of the kind of commitment they want to see on other, urgent issues.
We need to think hard what we can do more on this broader agenda. The EU has been flexible on SDRs and shown leadership on the loss and damage issue at COP27.  But how do we move forward a reform of the global financial architecture that is more equitable, fair and effective? We should not forget that this is not all about solidarity, it is also about our enlightened self-interest and geopolitical positioning. I will put these issues on the agenda of the upcoming informal meeting of EU development ministers in March to forge a joint way forward.
In addition, we need to keep reminding people just how much the EU does to support the UN around the world. When others are backing away from multilateralism, we keep investing in multilateral solutions everywhere, financially and politically. For this reason, I was glad to brief the Security Council on Thursday on the full range of EU-UN cooperation.
I pointed to our track-record of being the largest collective contributor to the UN budget; the biggest source of public climate finance at € 23 billion a year and that we have more than 5,000 women and men deployed on 21 crisis management operations on three continents, always working with the UN as their main partner. The most recent missions we launched are a partnership mission in Niger and another in Armenia.
There are not many crises on which we are not active and that are no other partner is offering more systematically support to the UN’s work than we do. Of course, judged against the needs, it is never enough, but it is something and maybe more than we tend to get credit for.
I leave New York encouraged by the strong resolve and support that the world has shown for Ukraine. But also convinced that there is a broader global agenda on which we need to be more proactive and attentive to the growing needs and expectations of a world that is full of crises.
Compliments of the European External Action Service, The Diplomatic Service of the European Union.
The post EU HR/VP Josep Borrell Speech | The world is demanding a just peace for Ukraine first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Bank lending grew faster in countries with policy packages combining large fiscal, monetary, and prudential measures.

Economists will be studying the pandemic for generations to learn from the dramatic global downturn and the ensuing credit crunch, but one important lesson about the scope of action needed to contain the next global crisis is already coming into focus.
During the pandemic, countries often used all-out responses that combined large fiscal, monetary, and prudential policies like grants, credit facilities, and relaxed capital requirements. As we demonstrate in a new working paper, this kind of expansive response may be needed to support corporate borrowing and credit growth in major future crises that combine global supply and demand shocks.
Our findings are based on an analysis using a dataset we made available last year tracking national announcements of economic and financial policy responses to the pandemic. Over the course of 2020, countries most frequently used packages of more than one fiscal, monetary, or prudential policy, while standalone policy announcements were rare.

As credit growth tanked early during the pandemic, policymakers in many countries aimed to stabilize bank lending to support their economies. Our analysis indicates that all-out packages boosted credit growth by a sizable 5 percentage points per quarter. Both size and scope were critical: even packages combining all types of policies, but where only some were large, were less effective.

Highlighting the importance of broad policy packages, all granular policy tools we tracked were more prevalent in successful packages than in others.
These all-out responses may have been effective because—faced by a large, unexpected, global shock—they pulled all levers relevant for credit growth. They eased binding constraints by shifting regulatory requirements. They incentivized incremental lending by addressing heightened concerns about credit risk. And they supported credit demand by lowering borrowing costs.
Within banks, the impact of policies was greater for those constrained by thin capital buffers.
Packages combining large fiscal, monetary, and prudential measures also translated into additional access to liquidity for bank-dependent firms. This allowed them to cover expenses—like wage bills—for two additional months while health measures limited sales.
While COVID-19 economic and financial policy packages were broadly targeted, they do not appear to have disproportionately benefited firms with poor performance prior to the pandemic.
Lessons for future crises
Our results underscore the importance of decisive action in terms of breadth and intensity of pandemic policy responses. In future crises that combine—as the pandemic did—negative supply and demand shocks with significant uncertainty, a similarly concerted, coordinated, all-out approach may have an important role to play in supporting the economy.
While there are benefits of an aggressive approach in response to a global shock like COVID-19, not all countries could respond in such a fashion. In particular, emerging and developing economies will likely continue to be more constrained, as they were in this episode.
To be sure, an all-out approach could also have unintended consequences. Large fiscal and monetary packages could support credit and the economy but also fuel sharp inflationary pressures. In countries with high debt, an increase in discretionary spending could strain debt sustainability. More work is needed to better understand how to calibrate the appropriate all-out response to minimize such costs.

Authors:

Divya Kirti
Maria Soledad Martinez Peria
Prachi Mishra
Jan Strasky
This blog includes research contributions by Yang Liu.

Compliments of the IMF.
The post IMF | In Major Economic Shocks, Best Response Combines All-Out, Large-Scale Policies first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.