Transition away from LIBOR requires significant commitment and sustained effort from both financial and non-financial institutions across many LIBOR and non-LIBOR jurisdictions.
The Financial Stability Board has identified that continued reliance of global financial markets on LIBOR poses clear risks to global financial stability. On 5 March 2021, ICE Benchmark Administration (IBA) and the UK Financial Conduct Authority (FCA) formally confirmed the dates that panel bank submissions for all LIBOR settings will cease, after which representative LIBOR rates will no longer be available. The majority of LIBOR panels will cease at the end of this year, with a number of key US dollar (USD) settings continuing until end-June 2023, to support rundown of legacy contracts only.
This updated Global Transition Roadmap (GTR) is intended to inform those with exposure to LIBOR benchmarks of some of the steps they should be taking now and over the remaining period to LIBOR cessation dates to successfully mitigate these risks. These are considered prudent steps to take to ensure an orderly transition by end-2021 and are intended to supplement existing timelines/milestones from industry working groups and regulators.
This does not constitute regulatory advice or affect any transition expectations set by individual regulators, which may require firms to move faster in some instances. It is important that all regulated financial institutions have an open and constructive LIBOR transition dialogue with their regulators, both home state and host state, throughout the transition period. As benchmark transitions vary across currency regions and legislation and other actions to promote transition are taking different paths in different jurisdictions, financial institutions, non-financial firms and others with exposure to LIBOR benchmarks should also monitor developments with regard to other IBORs relevant to their business.
Compliments of the Financial Stability Board.
The post FSB | Global Transition Roadmap for LIBOR first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Martin Arnold on 14 June 2021 |

You are getting close now to a decision on whether to pursue further work on the digital euro. You recently completed your public consultation on this, in which the biggest concerns were about privacy. So how do you address people’s concerns about privacy and still do all the necessary checks to make sure that it’s not abused for money laundering, tax evasion, and all of those things?
If the central bank gets involved in digital payments, privacy is going to be better protected. Why? Because we’re not like private companies. We have no commercial interest in storing, managing or monetising the data of users of a digital means of payment. We’re not a profit-maximising institution, we work in the interest of citizens. So we’re a different animal than private service providers. This also emerged from the public consultation. People feel safer if their information is in the hands of the central bank – a public institution – than if it is in the hands of private companies. Second, there are many ways in which we can protect confidential data while allowing the checks foreseen by law to avoid illicit transactions, such as those linked to money laundering, the financing of terrorism or tax evasion.
How would that work?
First of all, we could segregate the data. Suppose that I have to give you money. I’m the payer and you’re the payee. I would go to my bank, which would know that I’m making a payment and would transmit a code to the payment operator. The payment operator would transfer the payment between one code and another code. It would not know the identity of the payer behind the one code and the payee behind the other. So the payment will go through, but nobody in the payment chain would have access to all the information. But this is only one example. We could use cryptographic codes. It could be possible, for example, to make offline payments for small amounts, in which no data are recorded outside the wallets of the payer and payee. One could imagine that for payments of small amounts – €70 or €100 – you could have offline payments without a connection.
But don’t you need to link back to the identity if you’re going to restrict people to a certain amount? 
For these amounts, one can also imagine that you don’t do that. Why do we want to have all payments traceable? Because there are issues in terms of money laundering, the financing of terrorism and tax evasion. This risk is much lower for small transactions, as long as they are not used to split a larger payment into many smaller ones. We addressed this in past experimentation by introducing “anonymity vouchers”, making it possible to anonymously transfer a limited amount of digital euro over a defined period of time. So the concept is that controls should be cost-effective. For very small amounts, we could permit truly anonymous payments, but in general, confidentiality and privacy are different from anonymity. Full anonymity must be considered very carefully, because there is a trade-off between guaranteeing full anonymity and guaranteeing compliance with fundamental regulations in areas such as anti-money laundering, combating the financing of terrorism and tax evasion. And let’s not forget that citizens will still be able to use cash, which guarantees anonymity. There are many things we can do, with the help of technology, so people feel safe about how their data are used, and at the same time, so a payment can be reconstructed ex post if the police want to assess whether there’s been any illicit activity, any crime going on. But that would not be in line with the incentives of private intermediaries, which are interested in the commercial value of transaction data. We’ve done some preliminary experimentation on how to safeguard confidentiality with national central banks, which will be published. So we’re discussing possible ways to guarantee privacy. Why are we doing this? For obvious reasons and because the message that emerged from the consultation, as you said before, is very clear. Privacy is a top priority for users.
What about people who say that, while the ECB may not have commercial interests, you are a public sector body? So the idea of the government spying on people by looking at what they’re doing with their money, isn’t that also a concern for people?
I start from the assumption that people should be able to rely on a public institution, and we’ll make sure to set up governance structures to avoid any possible abuse of data. We’ll act within the scope of European legislation, which is the most advanced worldwide in protecting data, with an independent data protection supervisor that we will be interacting with.
Can you tell me a bit more about the experimentation? What does that entail? 
The experimentation we’ve done so far is to get a preliminary sense of the pros and cons of different technologies and the limits of, for example, handling payments while safeguarding confidentiality. In this preliminary phase, we’ve organised four work streams in which we’ve tested the possibility of running a digital euro with a centralised system, a decentralised one, a mixture of the two and with offline payments. If the Governing Council gives us the green light in July, we’ll start a formal investigation phase focusing on the design of a digital euro. After two years, we’ll get back to the Governing Council, and in the meantime we’ll interact with other European authorities and institutions – the Parliament, the Commission, the Council, the Eurogroup – all those who are involved, because the digital euro will require legislative changes. So at the end of these two years, ideally, we would have more clarity on the steps which would be necessary to issue a digital euro, if the decision were taken to launch it. Then we expect to have, by and large, three years to be able to implement what we have decided on, by working together with the technology providers and banks on the end user features of a digital euro so it could be integrated into the services that they’re already offering to their customers.
Why do you need legislation?
Because, for now, a digital euro is not explicitly foreseen in the European legislation. There are different ways in which you could define the legal basis for a digital euro, depending on its characteristics. Existing legislation may also need to be adjusted to cater for a digital euro. For example, to allow the anti-money laundering authorities to have powers to verify, ex post, not only transactions through bank accounts, but also through the digital euro.
Let’s take a slight step back. There are still some people who are scratching their heads and saying, what is the problem that you’re trying to solve with this project? What is the point of the digital euro?
First of all, for many centuries, from ancient Greece to the Roman Empire and Charlemagne, the sovereign has always offered money to citizens – sovereign money, which is the ultimate reserve of value for citizens. We’re doing the same. We intend to continue to do so. So why do we need a digital euro for this? There are two reasons. First, people are paying more and more digitally, and less and less with our current means of payment – cash. And second, people are buying more and more online, and with e-commerce it is relatively difficult to pay with cash. So people are using the means of payment backed by the central bank less and less. We’re moving into a digital era, so by introducing a digital euro we would be changing how people can access our balance sheet and use our means of payment.
So it is the decline of cash that you are responding to? But you can pay digitally with electronic money, you don’t need a digital euro to do so. I can already buy pretty much anything I like sitting here with my mobile phone. 
First of all, there is no digital means of payment that you can use everywhere in the euro area, from Finland to Cyprus.
What about a Visa card?
You can’t use it everywhere. As you know, even here in Frankfurt you can’t use Visa or American Express in every shop. And it can be expensive to use them. Second, I think that this is not just about preserving the role of the instrument of the central bank. There are many other reasons. First, we would offer a means of payment that is risk-free. I think that people do have the right to access the balance sheet of the central bank, which is the only risk-free institution, even less risky than the sovereign. One could imagine that, in most cases, liabilities of commercial banks are pretty similar to the liability of the central bank. But there are situations when differences do matter. You remember in the financial crisis when banks stopped trusting each other. So in that situation, the liability of a commercial bank was not perceived by citizens or by banks themselves as riskless. So you must have a riskless means of payment, a riskless financial instrument in the economy. And this is the liability of the central bank.
Are you also worried about the threat from cryptocurrencies and other central bank currencies? 
This is not why we started this analysis and will possibly start a project, but of course there is the potential threat that could come from others issuing a digital means of payment. This could be a so-called global stablecoin or another sovereign providing a digital means of payment. And if people do want to pay digitally and we don’t offer them a digital means of payment, somebody else would do that. So I can give you many, many reasons. And by the way, it’s not just about payments. This, I think, is a historical change that will not only change the way the financial system works. This will change the attitude of citizens towards digital instruments. I think this is a fundamental change to how payments will function in the future, both for the financial system and for society at large. And it is generating huge interest.
Do you think the end consumer is going to notice a big difference? Because legally they will have a claim directly on the central bank. But for all intents and purposes, it’s just going to be numbers on a screen, the same way that their digital deposits are shown on a banking app. 
Most of the time I would agree with you, but not always. The great financial crisis was a very big wakeup call. It’s not true that people don’t differentiate. Most of the time, they don’t need to differentiate between different means of payment, among liabilities of different issuers of different means of payment. But there are situations in which people do understand very well. They optimise. They don’t care about whether they have bank deposits or cash, unless the bank deposit becomes risky. In that case, they seem to understand the difference very well and they seem to differentiate very carefully.
Some people imagine that the central bank is going to be operating these digital euro accounts directly. But is that really how it’s going to work? You’re more likely to outsource the management and the operation of this to the commercial banks and some fintechs, right?
It’s theoretically possible that the central bank would handle the accounts of individual citizens. But it’s extremely unlikely that this would be the choice we would make. Why? First of all, there are currently, I believe, around two million or more bank employees in Europe, dealing with 400 million customers. There’s no way that the limited number of employees at the central bank could do this. So even if we were crazy enough to embark on such a project, we could not do it. We’re very productive, but not that presumptuous. Second, we don’t want to use the digital euro to change the structure of the financial system or to destabilise the functioning of the financial sector. Banks already provide citizens with a large number of services, and in the future they would add access to the digital euro as one additional service to build a business model with the “digital euro inside”. Banks are also much better than central banks at onboarding, and at know-your-customer and anti-money laundering checks. We could not do it. So even if it is theoretically possible, it’s very unlikely. What we want is for the digital euro to be a sort of raw material that we would hand over to banks to provide the services they are providing now, plus access to the digital euro, in the same way they’re already providing access to cash.
Only banks?
Well it would be intermediaries that are involved in the provision of payment services. They would need to be regulated and supervised intermediaries. So not only banks.
Is there a danger of crowding out innovation by the private sector? 
We’re a very peculiar supplier of services, because in general, private service providers want to take market share from competitors. We’re not that type of provider. What we want to do is negate the risk that the digital euro would crowd out banks and innovation in payments. So we’ll take care of that. I think the digital euro would be a source of innovation, not the opposite. And we’ll not crowd out banks, because this will be a public good provided by the central bank to foster innovation, progress and efficiency in the financial system.
That must be one of your primary concerns: to avoid destabilising the banking system in any way or facilitating runs on banks in crisis times? 
Absolutely. We’re reflecting on how to avoid that. What we want to offer is a means of payment, not a form of investment. To avoid crowding out banks, we are discussing possible alternatives. One possibility is to put a cap on the amount of digital euro that individual users could hold. So you can hold a maximum of, say, €3,000, but not more. Any money in excess of that would have to be transferred into a bank account. Another possibility is that you can hold as much as you want, but beyond a certain threshold, you would face a financial disincentive. Up to €3,000 euro, amounts held in digital euro would never be treated less favourably than cash, they would never be remunerated at interest rates below zero. But if for some reason you wanted to hold more than that, then you would face a financial disincentive that would discourage you from doing so. Why would we do that? Because if people could hold an unlimited amount of digital euro, they could shift all their deposits from bank accounts into digital euro, especially in the run-up to a crisis, potentially precipitating a banking crisis. Which would destabilise the financial system. By the way, these proposals which originate from the ECB are now being discussed quite widely around the globe.
Are you leaning towards one or the other of those?
No, we will take that decision after consulting with stakeholders, citizens, merchants and banks, and there are implications and pros and cons in either method. For example, the cap may be more powerful. You cannot hold more than €3,000 full stop. Right. But then we would have to deal with a number of complications. Suppose that you have €2,800 in your digital euro account and I owe you €500. If I make a payment to you, what happens to the €300 that exceeds the threshold, the cap of €3,000? Either the payment cannot go through, which would be disastrous as it would create uncertainty about the completion of a payment, or a waterfall mechanism would have to be set up to transfer the rest to a bank account. But that would mean obliging you to have a bank account, which is at odds with the concept of financial inclusion, which is one of our objectives. Access would need to be provided to basic bank accounts that are free of charge. Tiered remuneration is of course more market friendly. But is it powerful enough? In a crisis, it could be very difficult to have a financial disincentive that is large enough to cause you not to seek security if you fear that your bank could go under and that you could be bailed in. So you would need to bring down the remuneration of digital euro in excess of a threshold when there are concerns about a financial crisis. But then that would be a signal that would need to be managed. So, you see that there are solutions, but each of them – cap or tiered remuneration – has advantages and disadvantages.
Is a digital euro going to use blockchain, or distributed ledger technology?
In our tests, we have experimented with two systems. One is a centralised system known as TIPS. We have used this to analyse the functioning of a theoretical digital euro. How many transactions can be done per second using that infrastructure? And how much time does it take to complete each transaction? We had excellent results with TIPS, suggesting we could handle hundreds of millions of transactions per day, and the completion time for payments was negligible. Then we have also looked at distributed ledger technology (DLT). While there are types of DLT which are used by commercial banks for financial transactions, there’s no experience of DLT that could serve the needs of 400 million customers. And we’ve also experimented with a combination of the two, because there’s no reason why one should exclude the other. We could have a centralised system with different nodes, and then these different nodes would interact with the centralised base enabling you to multiply the power of the system. But this is a question for the IT experts.
Regulation of cryptocurrencies and stablecoins, how do you see that? Do you think that stablecoins need to be more tightly regulated? 
We still have unstable coins. To become stablecoins, a necessary although not sufficient condition is that they need to be regulated and supervised. And obviously, the coins have a number of risks for individual consumers and for the financial system at large. So what is the mechanism behind the so-called stable or unstable coins? The stablecoin issuer sells the coin to you, then uses the proceeds from the sale to invest in reserve assets. But those reserve assets do not have the certainty or stability of their value. They may be low-risk assets, but they are not risk-free assets. It is also uncertain whether the issuer holds an adequate amount of such assets to back the value of coins in circulation. Then there is the possibility of the value of the asset changing and the value of the coin changing. In periods of financial tension, there could be an expectation that the value of the coin would change significantly because of the value of the asset, and then there could be a risk of people going to the issuer and withdrawing their money. That is the mechanism that leads to a run. But unlike in the case of banks, there is currently no supervision. There is no deposit guarantee scheme and there is no emergency liquidity provision by the central bank, because the central bank cannot commit public money to save entities that are not subject to adequate prudential requirements, meaning that there is an inherent instability in the function of these coins – and for this reason they are still unstable coins. Once we have regulation and oversight, it is possible they might become more deserving of the name “stablecoins”. But only the money issued by the central bank is truly stable. Europe is at the forefront of regulation in this field. The European Commission’s legislative proposal for a regulation on Markets in Crypto-Assets (MiCA) sets out a number of mechanisms to reduce the risks to consumers and to financial stability. And the message sent is that until the regulation is in place, the presumption would be that no stablecoin should start operating in the euro area. At the same time, we are looking to adopt our oversight framework. We are currently discussing our new Eurosystem oversight framework for payment instruments – the PISA framework – and it will be adopted to include oversight of stablecoins. Once this is done, then we will discuss the possible introduction of such coins.
What about cryptocurrencies – bitcoin and the like? How are you managing them at the moment? Because the regulation framework isn’t in place yet. 
There is no formal mechanism that we can use to prevent any investor in the euro area from buying crypto-assets. They are not currencies; they are not money. The risks they bear are very high. I think there should be careful regulation. MiCA introduces regulation for crypto-assets. Our PISA framework will also give us the possibility to conduct oversight of crypto-assets.
What does this mean, oversight of crypto-assets? 
It’s very difficult to regulate them, to oversee them, because there is no responsible legal entity. They are decentralised. They could be in China. They could be in Switzerland or in South America. They could be anywhere. But to the extent that intermediaries are involved in the supply of those crypto-assets, then we would have regulation and oversight in place.
In my view, crypto-assets are very dangerous animals. They are not money, they are contracts that are perfectly fine for gamblers. We should try to protect consumers as much as possible. And we know from recent experience that those crypto-assets are largely used for criminal activities. We also have the issue of energy consumption. Bitcoin mining, for example, uses a huge amount of energy. This is not sustainable.
When will this supervision start? When is PISA coming into force?
By the end of this year, I hope. But we also need the MiCA regulation, because it is complementary to our PISA framework.
Let’s talk about monetary policy and the implications for that. You talked about imposing negative interest rates on digital euro to disincentivise people from holding too much of it. Could it be a way to make interest rates even more negative?
No, because first of all, we’re not planning to withdraw cash. The reason why there is an effective lower bound for monetary policy is that if you bring interest rates too low, people would turn to cash, as the cost of storing cash would become lower than the cost of holding a non-cash instrument.
We’re not introducing the digital euro because we want to change the way we implement monetary policy in any way. We’re not planning to withdraw cash. So we would never use the digital euro for monetary policy, and we would never use it to impose deeply negative interest rates by design, because we’ll continue to supply cash.
Have you got any idea of the cost of launching the digital euro project? 
Currently we pay for the costs of producing banknotes and end users are not charged, but we are not losing money. Quite the contrary, because we earn seigniorage – which results from the difference between the face value of money and the cost of issuing it. Likewise, with the digital euro we won’t charge end users and we will incur some costs, but we won’t lose money. Seigniorage means we’ll have more liabilities and more assets, and we’ll make money out of that investment under normal market conditions. As part of the investigation phase, we’ll discuss the overall architecture and how the various stakeholders involved in the transactions charge each other, but citizens paying with digital euro won’t be charged. And I don’t think that the cost of issuing a digital euro will be large. We already have experience with wholesale and retail payments. Suppose that we use TIPS – the technology is already in place. And national central banks already use DLT. So I don’t expect the cost to be prohibitive. And the proceeds would be very large, because that’s a way of maintaining the size of the balance sheet, which means that you have more liabilities and more assets. This means that you’ll earn more seigniorage.
Will intermediaries make money on it?
The ECB as the issuer will not charge users. Intermediaries will offer services with digital euro inside to cover their costs. This is a complicated issue that will have to be addressed: the interaction between banks, intermediaries and customers. And competition has to be ensured to limit the fees and charges for customers.
How will this change the world of finance, the world of money for the consumer out there? 
This would be a very powerful push for digitalisation. It would allow everybody to have access to a safe, risk-free, cost-free means of payment in the digital era. We’re currently still in a period of transition, but 20 years from now, everybody will be using digital instruments. The digital euro and cash could co-exist, but I’m sure that everybody would be using digital means of payment. You can build programmable products at lower cost. For instance, users could decide to allow automatic payments for routine transactions, such as paying bills, using a toll road, going to the cinema or parking.
So is this just for the eurozone or will it be available to people outside the eurozone? And if so, is there a danger you erode the monetary sovereignty of smaller countries? 
There is indeed such a danger, and that is why we’re considering which potential users should have access to digital euro. Within the euro area, €3,000 would already be above the cash requirements of most people today. But in some countries, including some not far from us, with lower GDP per capita, €3,000 in digital euro form could be too large an amount, as it could trigger financial instability by depleting bank deposits. We’ll have to reflect very carefully on access and limits for foreign users. Of course, foreigners that come to the euro area as tourists should have access to digital euro. But here too, we would use limits.
Then there is another and more positive international dimension: the possibility of doing cross-border payments. We’re already cooperating at the international level. The advantages of introducing central bank digital currencies would be maximised if we made them interoperable, as they could make cross-border payments more efficient and much cheaper.

Compliments of the European Central Bank.
The post ECB Interview | A powerful push for digitalisation first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

It’s exciting to see so many “open” signs appearing in store windows across the country. But some companies making the transition to an in-person workplace may find themselves in a short-term cash flow crunch. Even before the pandemic, the FTC raised concerns about deceptive practices related to small business financing. With many companies working to regain their footing, the FTC has tips on protecting yourself when looking for financing.
Consider close to home. If you already have financing through a local lender, that may be the first place to look for additional credit. A hometown financial institution knows you well and understands the business conditions in your community.
Looking online? Don’t rely just on search results. Online lenders may broaden the market for small business financing, but they also require careful vetting on your part. Don’t just type in “small business loan” and assume that the search results and rankings can tell you anything about those companies. Whether you’re considering a Main Street institution or an online company, investigate them thoroughly.
Don’t click on links in unsolicited emails. Scammers know that many consumers and small businesses are looking for loans right now, so they have shifted their pitches accordingly. If an email arrives out of the blue with a financing offer, treat it with the utmost suspicion. Even clicking on a link is risky. It could hide malware.
Ask questions before turning over confidential information. If a random stranger asked you for corporate or personal financial data, you’d tell them to hit the bricks. Follow that same policy when applying for financing. Don’t fill out an online loan application without first determining who’s at the other end. Some companies may appear to offer loans, but what they really do is sell your information to third parties. Other outfits are flat-out fraudsters looking to commit identity theft. Have you spotted a sketchy business financing offer? Report it to the FTC.
Understand the ins and outs of new financing options. When it comes to small business financing, many companies in the marketplace operate differently from what you may be used to. Study the offer carefully before signing on the dotted line. Does the deal require a personal guarantee? What happens if a payment is missed? If there is anything you don’t understand, contact the lender or provider and insist on an answer in writing. When it’s your money on the line, there’s no such thing as a silly question. And if you feel that a sales person is rushing you, that’s a sure sign for you to rush in the opposite direction.
Seek advice from trustworthy experts. Don’t you wish you had a hotline to a successful business executive who could offer you advice on money matters, including ways to access capital? As it happens, you probably do. Reach out to a respected person in your circle – maybe it’s someone in your neighborhood, at your place of worship, or in the local business community – and extend an invitation for coffee. In addition, look into groups like Small Business Development Centers(link is external) – a public-private partnership of the SBA and universities, state agencies, and the private sector – or other organizations in your area that offer free consulting for small business owners. The important point is that before committing to a financing offer, bounce ideas off a trustworthy person not affiliated with the prospective lender.
Compliments of the U.S. Federal Trade Commission.
The post FTC | Looking for small business financing? first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

On June 15, the European Commission, in its first NextGenerationEU transaction, raised a €20 billion via a ten-year bond due on 4 July 2031 to finance Europe’s recovery from the coronavirus crisis and its consequences. This is the largest-ever institutional bond issuance in Europe, the largest-ever institutional single tranche transaction and the largest amount the EU has raised in a single transaction.
The bond has attracted a very strong interest by investors across Europe and the world, thanks to which the Commission has obtained very favourable pricing conditions, similarly to the repeatedly successful issuances under the SURE programme.
European Commission President Ursula von der Leyen said: “Today is a truly historic day for our European Union. We successfully conducted the first funding operation for NextGenerationEU. As a strong Union, we are raising money at the markets together and investing in a common recovery from this crisis. It is an investment in our single market. And even more importantly, it is an investment in the future of Europe’s next generations as they face the challenges of digitisation and climate change. Money can now start flowing to help reshaping our continent, to build a greener, more digital and more resilient Europe. I will now visit every Member State, to see NextGenerationEU impact on the ground.”
Commissioner in charge of Budget and Administration, Johannes Hahn, said: ”Today, we have reached a key milestone in implementing NextGenerationEU. After laying all the foundation at record speed, we have today successfully conducted the first borrowing operation under the Recovery Plan. This is just a very first step of a long journey, bringing over €800 billion in current prices into the EU economy. NextGenerationEU has now become a reality and is set to drive our collective recovery from the pandemic, setting Europe on a green, digital and resilient path.”
The funds will now be used for the first payments under NextGenerationEU, under the Recovery and Resilience Facility and various EU budget programmes.
By the end of 2021, the Commission expects to raise some €80 billion in bonds, to be complemented by short-term EU-Bills, as per the funding plan published in June 2021. The exact amount of both EU-Bonds and EU-Bills will depend on the precise funding needs, and the Commission will revise its initial assessment in the autumn. In this way, the Commission will be able to fund, over the second half of the year, all planned grants and loans to Member States under the Recovery and Resilience Facility, as well as cover the needs of the EU policies that receive NextGenerationEU funding.
Background
NextGenerationEU is a temporary recovery instrument of some €800 billion in current prices to support Europe’s recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe.
To finance NextGenerationEU, the European Commission – on behalf of the EU – will raise from the capital markets up to around €800 billion between now and end-2026. €407.5 billion available for grants (under RRF and other EU budget programmes); €386 billion for loans. This will translate into borrowing volumes of an average of roughly €150 billion per year.
Given the volumes, frequency and complexity of the borrowing operations ahead, the Commission will follow the best practices used by large and frequent issuers, and implement a diversified funding strategy.
This strategy presents a diverse range of instruments and techniques, going beyond the back-to-back approach that the Commission has used so far to borrow from the markets, including in the framework of the SURE programme. Over the past 40 years, the European Commission has run several lending programmes to support EU Member States and third countries. All of these lending operations were financed on a back-to-back basis, mainly through syndicated bond issuances.
Technical section

The new 10-year bond carries a coupon of 0% and came at a re-offer yield of 0.086% providing a spread of -2 bps to mid-swaps, which is equivalent to 32.3 bps over the 0.00% Bund due 02/2031.
The final order book was in excess of €142 billion, which meant that the bond has been over seven times oversubscribed.
The joint lead managers were BNP Paribas, DZ BANK, HSBC, IMI-Intesa Sanpaolo and Morgan Stanley. Co-leads were Danske Bank and Santander.
The demand was dominated by fund managers (37%), and bank treasuries (25%) followed by central banks / official institutions (23%). In terms of region, 87% of the deal was distributed to European investors, 10% to Asian investors and 3% Investors from the Americas, the Middle East and Africa.

Summary of the distribution:
By Geography

Germany
13%

France
10%

UK
24%

Benelux
15%

Nordics
10%

Italy
5%

Other Europe
10%

Asia
10%

Americas
3%

Total
100%

By Investor Type

Central Banks / Official Institutions
23.0%

Fund Managers
37.0%

Insurance and Pension Funds
12.0%

Bank Treasuries
25.0%

Banks
2.0%

Hedge Funds
1.0%

Total
100%

Compliments of the European Commission.
The post NextGenerationEU: European Commission raises €20 billion in first transaction to support Europe’s recovery first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Digital forms of money could be a boon for emerging market and lower-income economies if the transition is well managed and regulated
Digital money has the potential to transform the financial sector. Emerging markets and lower-income countries stand to gain the most from this dramatic shift. Broad and inexpensive access to digital money and phone-based transactions could open the door to financial services for 1.7 billion people without traditional bank accounts. And countries may grow increasingly connected, facilitating trade and market integration. The real-world impact is significant.
But with any opportunity comes risk. The passage to this new world could exclude those on the other side of the digital divide. It also opens the door to fragmentation, currency substitution, and loss of policy effectiveness. The transition must be well managed, coordinated, and soundly regulated.

WHAT IS DIGITAL MONEY?
Digital money is the digital representation of value. The public sector can issue digital money called central bank digital currency—essentially a digital version of cash that can be stored and transferred using an internet or mobile application. The private sector can also issue digital money. Some forms can be redeemed for cash at a fixed face value. These are fully backed with very safe and liquid assets and are usually referred to as e-money. Stablecoins can be a form of e-money, but also come in other designs whose value is more volatile. Crypto assets, such as Bitcoin, are issued in their own denominations and are especially volatile—too much to be considered a form of digital money (they are usually considered an investment asset). Click here for a detailed discussion of different forms of digital money.

Emerging markets lead the way
Consider a worker in the United States. In the near future, an employer could deposit her paycheck in a digital wallet, allowing her to send money to relatives in Guatemala, the Philippines, or any other country more cheaply and efficiently. Fees for wiring money often take up to 7 percent of the value of a transaction, and the World Bank estimates that cutting fees to 2 percent could give a $16 billion a year boost to remittances to low-income countries.
This future is not distant. Private sector innovation in emerging markets has already made a mark in the area of mobile money. The M-pesa mobile money transfer service, which started in Kenya, is being replicated in dozens of countries in Africa and Asia. It has brought payments to many without bank accounts—but with a flip phone in their pocket—and has opened the door to other financial services, like savings and credit products.
Today, there are a billion registered mobile money accounts across 95 countries, with close to $2 billion transacted through these accounts every day. Sub-Saharan Africa is a leader in mobile money, accounting for almost half of mobile money accounts worldwide. The widespread use of mobile phones has made this possible. Digital identities, which many countries have rolled out, are another important innovation. These digital versions of passports allow mobile money providers to onboard customers at low cost while complying with local regulations.
The public sector too is taking steps to provide a digital payment infrastructure in emerging markets. The Bahamas is the first country in the world with a central bank digital currency (a digital form of a country’s currency). Called the “sand dollar,” it will increase financial inclusion for inhabitants spread out across the country’s 700 islands, where banking services such as cash machines are not always available.
Other countries are not far behind. The most ambitious project is being piloted by China’s central bank. If the e-Renminbi experiment is successful, it could boost digitalization, innovation, and financial inclusion in one of the world’s largest and most vibrant economies, possibly encouraging other countries to follow suit.
Maintaining a balance
But many of these potential benefits require careful and farsighted policy support. To start, new infrastructure is essential to allow poorer households in isolated areas to connect to new digital payment services. Global satellite networks (Starlink, OneWeb, and others) are expected to provide widely accessible broadband services, including to lower-income countries, as soon as 2022. But a financial inclusion strategy cannot rely on a signal simply falling from the sky.
A synchronized infrastructure investment push is needed including to broaden internet access to poorer and remote areas. In fact, when many countries act at the same time, public infrastructure investment can help lift growth domestically and abroad through trade linkages. These investments are necessary to support a viable digital payment strategy.
In many countries, financial inclusion may mean trade-offs when it comes to privacy and competition policy. Digital payment companies are increasingly capturing and monetizing consumer data. Without collateral to offer, poorer households and microenterprises can offer their data, but at the cost of their privacy. Regulation will have to strike just the right balance, including to incentivize market entry of new payment companies while limiting their dominance.
In fact, countries will need to ramp up regulatory and supervisory capacity more generally before payment innovations hit the market. Regulation and careful supervision are key to anchoring trust in new digital forms of money. However, questions still abound. Payment providers may well be required to fully back coin issuance with safe and liquid assets, but which assets? Should these be kept in commercial banks or perhaps even in central banks? What backstops might the state be prepared to offer? And what if the digital money is being offered by a foreign firm—how should regulators cooperate across borders? These questions are new and need to be pondered carefully.
Clear legal frameworks are also essential. Central bank–issued digital currencies will likely require adaptation to central bank law and monetary law. And public law must clarify the legal status of privately issued money. Should new arrangements be treated as electronic money, bank deposits, securities, commodities, or something else? Answers to these questions will have enormous bearing on the development of digital money. For instance, classifying a form of digital money as a security will significantly complicate its exchange, given the complexity of securities regulation.
Other risks must also be contained. New digital forms of money must stand up to cyberattacks, outages, technical glitches, fraud risks, and faulty algorithms. And without proper regulation, digital money could be a virtual safe haven for criminals’ illicit financial transactions. Effective implementation of a robust framework to combat money laundering and the financing of terrorism is needed. However, digital money also brings regulatory opportunities, such as more effective real-time data analytics and monitoring.
Current regulatory approaches and legal frameworks are fragmented. There is little guidance, and country circumstances differ significantly. The IMF has a role to play in providing policy advice to countries and helping institutions develop sound regulatory approaches and share best practices.
In their effort to join, benefit from, and regulate the digital money revolution, countries must not lose sight of the bigger picture. Regulatory and legal frameworks, as well as central banks’ decision to offer their own digital currencies, will affect private sector participation and innovation. The role of banks may change if they face more intense competition for funding as clients debate whether to exchange their deposits for the potentially safer currency of central banks. Careful decisions must also ensure that new forms of digital money are environmentally sustainable—that the energy they require is kept in check. The path to digital money adoption must be guided by a clear and responsible vision of tomorrow’s broader payment, financial, economic, and environmental landscape.
A global approach
The bigger picture actually extends far beyond each country’s borders. The digital money revolution will happen on a global scale. Emerging markets and lower-income countries will be affected by the introduction of digital forms of money in larger, more advanced economies. They must be aware of these changes, and the IMF will stand beside them to ensure that the international monetary system continues to work for all countries.
‘The IMF will play a key role in the new era of digital money’
The lower costs of obtaining, storing, and spending digital money could make it easier for people and companies to substitute their domestic currency with a more stable currency, especially in countries with high inflation and volatile exchange rates. This practice is already widespread—foreign currency deposits exceed 50 percent in more than 18 percent of countries worldwide. As this level rises, the home country loses control over monetary policy. This has a disproportionate impact on poorer and more vulnerable households, which typically find it harder to diversify their savings to protect against volatile inflation.
Policies are currently being explored. In countries where there is risk of capital outflows, questions arise about the technical feasibility—and policy desirability—of limiting foreign digital currency transactions and holdings. It may be possible to agree on design principles that allow country authorities to set basic parameters for wallets and networks to limit currency substitution. However, these design principles must be coordinated at the global level to ensure that they meet the needs of all countries and that they are widely adopted to limit regulatory arbitrage. This is another area where the IMF can help through its analysis and convening power.
The question also arises of whether existing capital flow management measures—such as taxes on purchasing foreign currency—may be circumvented by digital forms of money. Most IMF member countries, particularly emerging markets and lower-income countries, use some form of capital flow management. Existing regulations and implementation practices must evolve so that capital flow management measures remain strong following the introduction of digital money.
Digital money would also likely increase gross capital flows as transaction costs diminish and financial products become more widely available. This comes with both pros and cons. Markets should become more integrated, offering risk-sharing and hedging opportunities for local households and firms. Yet the risk of financial contagion would also increase, as would the danger of balance of payments problems, since swings in asset valuations are amplified as the stock of foreign assets increases.
Finally, the risk of fragmentation and of a global digital divide is stark. Regional arrangements to settle digital money could proliferate, driven by countries’ desire for autonomy. Such arrangements could become instruments of geopolitical interests and forces—to avoid or impose bilateral sanctions—and could limit currency convertibility.
Yet there are also opportunities. Digital money could be leveraged to foster integration and interoperability of payment systems. New solutions must be explored, such as multilateral settlement and exchange platforms, as well as common norms or principles for the design of digital money to facilitate cross-border payments, such as remittance flows, which are essential for many lower-income countries. The IMF is actively working with the international community—member countries and other international organizations—to defend the integration of payment systems and oppose their fragmentation.
The IMF will play a key role in the new era of digital money. The organization was created to promote international monetary cooperation and oversee the stability of the international monetary system, as well as contribute to countries’ economic and financial stability. Digital money must be regulated, designed, and provided in a way that allows countries to maintain control over monetary policy, financial conditions, capital account openness, and foreign exchange regimes. Payment systems must grow increasingly integrated, not fragmented, and must work to help all countries guard against a digital divide.
Much remains to be done, but the opportunities are immense, to the extent the risks are carefully managed. The key to building a brighter future is cooperation—between the private and public sectors domestically and national authorities and organizations internationally. The IMF, with its near universal membership, stands ready to play its part in this momentous endeavor.
Authors:

Tobias Adrian is the financial counsellor and director of the IMF’s Monetary and Capital Markets Department.

Tommaso Mancini-Griffoli is division chief in the IMF’s Monetary and Capital Markets Department.

Compliments of the IMF.
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Access to affordable and decent housing is vital for good health, job opportunities and life satisfaction, but housing remains one of the most complex policy challenges facing societies today. Governments must do more to ensure universal access to affordable, high-quality, environmentally sustainable housing, according to the OECD.
The COVID-19 crisis has uncovered how unevenly housing is distributed across population groups, and has worsened the adverse impacts of poor housing conditions, notably on the most vulnerable.
Launched in 2018, a wide-ranging OECD Housing Project has gathered comparative evidence, analysis and policy recommendations to help governments make housing more affordable, more energy-efficient and better adapted to people’s needs.
“Housing is much more than just a place to live,” said OECD Secretary-General Mathias Cormann. “It is the single largest household budget item and a key element in both economic performance and well-being.”
“The OECD Housing Policy Toolkit we are presenting today will help policymakers design better housing policies that address the reality of developments in housing markets, such as the affordability challenge, and improve the considerable effect housing policy has across societies,” Mr Cormann said.
With housing prices in many countries rising dramatically – lodging costs now absorb more than a third of the budget of the poorest 20%, compared with only a quarter of the budget of the top 20% – and public investment at historically low levels, four key priority areas emerge from the Toolkit.
First, unlocking additional supply will be key to meeting both current and future housing challenges. More public investment in energy-efficient social housing would ease housing difficulties, especially for households on low or unstable incomes. Building green social housing can also act as a catalyst for the energy transition of the construction industry as a whole.
Second, land-use reforms, such as the removal of overly tight building restrictions or minimum parcel size requirements, can reduce obstacles to new residential construction. Decisions on land use and planning must be made based on the needs of whole metropolitan areas rather than via a piecemeal district-by-district approach. Such reforms would put a brake on the strong upward trend in real house prices that has been widespread among OECD countries for the past four decades.
Third, greater flexibility in regulations over landlord-tenant relations, including rent control, can encourage investment in housing. Over the past year, these restrictions have been tightened to protect tenants hit hard by the Covid-19 crisis. Over time, the Toolkit’s overview report notes, such measures can discourage the supply of rental housing, ultimately making access to rental more difficult, especially for those on low or unstable incomes.
Fourth, application of stringent environmental standards, to achieve agreed greenhouse gas emission reduction targets and upgrade the energy efficiency of the existing housing stock, will be essential. This may put upward pressure on housing construction costs or rental prices, but these investments will translate to lower heating costs and preserve the long-term value of the houses.
The Housing Policy Toolkit includes:

An overview report, Brick by Brick: Building Better Housing Policies, which identifies policy levers that can enhance the efficiency, inclusiveness or sustainability of housing markets. It highlights ways to bring progress across these objectives and also discusses addressing trade-offs that can arise among them.
A Dashboard of Housing Indicators, which gathers indicators allowing policymakers to compare outcomes and policy settings across countries by topic.
A set of Country Snapshots offering national overviews of housing conditions and policies.

Compliments of the OECD.
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Countries must step up their efforts to enable people to continue learning throughout their lives to navigate a rapidly changing world of work shaped by globalisation and the consequences of the COVID-19 pandemic, according to a new OECD report.
OECD Skills Outlook 2021: Learning for Life says that public policies should play a key role in facilitating effective and inclusive lifelong learning, but much remains to be done.
It will be crucial to invest part of the resources devoted to the recovery to lifelong learning programmes, involving all key stakeholders and with a focus on vulnerable groups, particularly young people, the NEET (neither in employment, education or training) and those whose jobs are most at risk of transformation, says the report.
“It’s essential that lifelong learning becomes a reality for everyone since the crisis has further accelerated the transformation in our economy and skills needs. Today, too many adults do not participate in workplace learning and the pandemic has further reduced their opportunities to do so,” said OECD Secretary-General Mathias Cormann, launching the report in Paris. “In the recovery efforts, skills will make the difference between staying ahead of the curve or falling behind in a world in constant flux. Countries need to invest part of the resources devoted to the recovery to lifelong learning programmes, involving all key stakeholders and with a specific focus on vulnerable groups – including young people, women and workers whose jobs are most at risk of transformation. ”
Even before the pandemic, only two out of ten low-educated adults took part in formal or on-the-job training, compared to six out of ten high-educated adults. Participation in adult learning also differs greatly across countries: fewer than 25% of adults in Greece, Italy, Mexico and Turkey report participating in adult learning, compared to over 55% in Denmark, Finland, New Zealand, Norway and Sweden.
The pandemic may also affect the learning attitude of children and youth. The disruptions to regular schooling led many children to progress less than expected in skill development. In the short term, the pandemic could lead to increases in early school leavers. In the medium and long term, lower engagement could result in the current generation of students failing to develop positive learning attitudes, at a time of profound structural changes that will require individuals to upgrade their skills throughout their life, warns the report. Furthermore, the report identifies potential cause of gender inequality in training opportunities. Up to 28% of “inactive but motivated” women mention family obligations as a barrier to participating in training, compared to only 8% of men. The gender gap widens when children appear in the family.
To enable more people to continue learning and updating their skills, the report says countries should focus on three key issues:

Place learners at the centre of learning: diversified learning opportunities can enhance the quality of education and training. Policy design must be inclusive, affordable, accessible and adaptable.

Skills for a lifetime: lifelong learning rests on strong foundation skills, such as literacy and numeracy, the willingness to learn, and a habit of learning. Policies should harness the power of technology while also considering the effects technology can have on existing skills inequalities and the creation of new ones.

Strong co-ordination for high quality, inclusive learning: policies should build strong co-ordination, knowledge management and information sharing to bring lifelong learning to the required scale. Policies should aim at improving recognition, validation and accreditation procedures to enhance the visibility and transferability of the skills taught in these programmes.

The report is available at https://www.oecd.org/education/oecd-skills-outlook-e11c1c2d-en.htm.
For more information, journalists should contact Francesca Borgonovi of the OECD’s Centre for Skills or the OECD Media Office (tel. + 33 1 45 24 97 00).
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world
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Main results
The 18th EU-Canada summit took place in Brussels on 14 June 2021. Charles Michel, President of the European Council, and Ursula von der Leyen, President of the European Commission, represented the EU. Canada was represented by Prime Minister Justin Trudeau.
The leaders discussed how to work together to end the COVID-19 pandemic and pursue a sustainable, people-centred and inclusive recovery. They reaffirmed their ambitious commitments on fighting climate change and protecting the environment, and their determination to promote democratic values, peace and security.
They also launched a new Canada-EU dialogue on health, an Ocean Partnership Forum and an EU-Canada Strategic Partnership on Raw Materials.
Following the summit the leaders issued a joint statement.

EU-Canada joint statement, 15 June 2021
Remarks by President Charles Michel following the 18th EU-Canada summit

“Defeating COVID-19 remains our top priority. The EU is the largest exporter of vaccines — we have exported roughly half of the vaccines we have produced. We have supported Canada’s vaccination campaign by shipping roughly 16 million doses to Canada. This represents 60% of all vaccines received by Canada.”
President Charles Michel

Infographic – COVID-19: the EU’s contribution to global vaccine solidarity
See full infographic

Ending the COVID-19 pandemic and driving a sustainable global recovery
The leaders committed to stepping up multilateral efforts to help ensure universal, equitable and affordable access to COVID-19 vaccines, diagnostics and treatments through the Access to COVID-19 Tools Accelerator. They welcomed the G7 commitment to share at least 870 million vaccine doses directly over the next year, targeting those in the greatest need.

EU’s international solidarity during the COVID-19 pandemic (background information)
G7 summit, Cornwall, UK, 11-13 June 2021

The leaders also welcomed the scaling-up of manufacturing capacities in order to increase and diversify the supply of COVID-19 vaccines while maintaining open and secure supply chains.
The EU and Canada will coordinate efforts to strengthen the World Health Organization (WHO) and the global health security architecture in general to be better prepared for future pandemics.

“I welcome Prime Minister Trudeau’s support for an international treaty on pandemics in the framework of the WHO.”
President Charles Michel

To enhance bilateral collaboration on pandemic preparedness, the leaders launched a new Canada-EU dialogue on health under the EU-Canada strategic partnership agreement (SPA).

EU-Canada strategic partnership agreement (EEAS)

The leaders agreed to steer the global recovery towards green, innovative, inclusive and resilient economies and the creation of decent jobs. Another common objective is to make global supply chains more resilient and sustainable.
Furthermore, the leaders will seek a consensus-based solution as regards a reform of the international tax architecture by mid-2021 within the OECD, in line with G7/G20 commitments.
They also agreed to resume travel between the EU and Canada as soon as this can be done safely.
Fighting climate change and protecting the environment
Recognising the urgency and the interlinked nature of the challenges posed by climate change and biodiversity loss, the leaders stressed the need to step up global action and provide more coordinated responses.
The EU and Canada are determined to reach the most ambitious outcome possible at the upcoming 26th UN Climate Change Conference (COP26) to keep the world on track to achieve the goals of the Paris Agreement.
Aiming to lead by example in becoming climate-neutral economies by 2050, the EU and Canada will fully and swiftly implement their enhanced 2030 emissions reduction targets/Nationally Determined Contributions (NDCs).
The two sides will strengthen their collaboration on promoting measures and technologies to support a just energy transition. They remain committed to scaling up efforts to meet the climate finance goal of $100 billion per year goal through 2025, and to scaling up their financial contribution to climate adaptation action.

Climate change: what the EU is doing (background information)

The leaders agreed to pursue the adoption of an ambitious global framework to conserve, protect and restore biodiversity at the next UN Biodiversity Conference (COP 15) and ambitious outcomes at the UN Food Systems Summit, with a view to leading a global transformation towards sustainable food systems.
The EU and Canada will step up cooperation and multilateral action on the circular economy, the efficient use of natural resources and the sound management of chemicals and waste. They will also work towards a new global treaty on plastics, including to combat ocean plastic pollution. In this context, the leaders launched an Ocean Partnership Forum under the EU-Canada Ocean Partnership Declaration.

Infographic – Comprehensive Economic and Trade Agreement (CETA) fuels EU-Canada trade growth
See full infographic

Harnessing the potential of trade, technology and innovation
The leaders reaffirmed their strong support for the rules-based multilateral trading system and the indispensable role played by the World Trade Organization (WTO). They agreed to work together to strengthen and modernise the WTO, including through close cooperation in the Ottawa Group of like-minded countries.
They welcomed the positive results achieved by the provisional application of the Comprehensive Economic and Trade Agreement (CETA) and remain strongly committed to ensuring its full and effective implementation.

“This year we celebrate the 5th anniversary of the signing of CETA. This agreement is good for our citizens, for our businesses and for our economic recovery.”
President Charles Michel

EU-Canada trade (European Commission)

To diversify sources of important green and digital economy inputs away from less like-minded producers, and to foster competitive EU-Canada supply chains, the leaders established an EU-Canada Strategic Partnership on Raw Materials.
The EU and Canada will deepen digital cooperation through the Canada-EU Digital Dialogue and the Global Partnership on Artificial Intelligence (GPAI), leveraging digital tools to promote a sustainable post-COVID-19 recovery. To ensure that the Internet remains free, secure and open, the EU and Canada jointly support global standards for and regulatory approaches to digital trade and technologies.
Cooperation between the two sides will also be enhanced in other key areas, including the Horizon Europe research programme, higher education, hydrogen, artificial intelligence, quantum technology and space.
Promoting democratic values, peace and security
The EU and Canada will continue to cooperate closely on promoting international peace and security and their shared values, including defending human rights, gender equality, media freedom, liberal democracy, the rule of law and the rules-based international order.
They will work closely together to address common concerns and challenges faced in relations with China and Russia, and discuss engaging with these countries where that is possible and in the EU’s and Canada’s respective interests.
The leaders warmly welcomed the invitation received by Canada to participate in the PESCO Military Mobility project. Alongside the US and Norway, Canada will be among the first non-EU countries to participate in the project, representing another important step towards closer EU-Canada partnership in security and defence.
The leaders reaffirmed their support for Ukraine’s territorial integrity and for the Belarusian people’s calls for a democratic and just Belarus. They also resolved to further deepen cooperation and dialogue on key regional issues, including in relation to the Middle East, the Eastern Mediterranean, the Indo-Pacific, Myanmar, Iran/JCPOA, Africa (particularly the Sahel region) and Venezuela.
Finally, the leaders reaffirmed their determination to strengthen their cooperation on matters pertaining to the Arctic, and to conclude a new EU-Canada Passenger Name Record (PNR) Agreement as soon as possible.
Background
EU-Canada relations are underpinned by a Strategic Partnership Agreement (SPA) and a Comprehensive Economic and Trade Agreement (CETA). Provisionally applied since April 2017, these agreements have greatly boosted both sides’ economies and led to an ever closer partnership between the EU and Canada.
Compliments of the Council of the European Union and the European Council.
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Main results
The EU-US summit on 15 June 2021 marked the beginning of a renewed transatlantic partnership and set a joint agenda for EU-US cooperation in the post-pandemic era. The leaders committed to regular dialogue to take stock of progress.
Key summit deliverables include three major new trade initiatives. The leaders agreed to:

create a Cooperative Framework for Large Civil Aircraft
engage in discussions to resolve differences on measures regarding steel and aluminium by the end of the year
establish an EU-US Trade and Technology Council

Charles Michel, President of the European Council, and Ursula von der Leyen, President of the European Commission, represented the EU. President Joe Biden represented the United States. It was the first EU-US summit since 2014 and the first visit by a US President to the EU institutions since 2017.
At the end of the summit, the leaders adopted a joint statement.

EU-US summit statement: “Towards a renewed Transatlantic partnership”
Remarks by President Charles Michel following the EU-US summit in Brussels, 15 June 2021

COVID-19, health preparedness, sustainable global recovery

Infographic – COVID-19: the EU’s contribution to global vaccine solidarity
See full infographic

We want to send COVID-19 to the history books, and there is only one way: international cooperation. We must deliver on this, by making sure that the world’s population has access to vaccines.
President Charles Michel

The EU and the US committed to continuing to support the COVAX Facility and encourage more donors to make two billion vaccine doses available worldwide by late 2021. They aspire to provide enough vaccine doses to inoculate two-thirds of the world’s population by the end of 2022.
The leaders highlighted the creation of a Joint EU–US COVID Manufacturing and Supply Chain Taskforce. Its objective is to expand vaccine and therapeutics production capacity by:

building new production facilities for vaccines and therapeutics
maintaining open and secure supply chains
avoiding any unnecessary export restrictions
encouraging voluntary sharing of know-how and technology

The EU and the US will reinforce cooperation on reforming the World Health Organization (WHO). The leaders welcomed the idea of assessing the benefits of developing a WHO convention, agreement or other international instrument on pandemic preparedness and response.

Learning the lessons from COVID also means learning how to prepare for future pandemics and health crises. We discussed a possible treaty on pandemics.
President Charles Michel

The leaders also called for progress on a transparent, evidence-based, expert-led and WHO-convened phase-2 study on the origins of COVID-19 that is free from interference.
The leaders welcomed G7 discussions on building back better for the world, orienting development finance tools towards challenges such as creating resilient infrastructure and technologies, and addressing the impact of climate change.

G7 summit, Cornwall, UK, 11-13 June 2021

The EU and the US intend to jointly drive forward a sustainable and inclusive global recovery, in line with the UN 2030 Agenda for Sustainable Development. They will continue providing assistance to countries in need, address debt vulnerabilities and stimulate domestic reforms and increased private investment.
The leaders agreed to establish a joint EU-US experts’ working group for the resumption of non-essential safe and sustainable travel between the EU and the United States.
They welcomed the progress made in discussions on additional EU member states benefitting from visa-free travel to the US, and agreed to continue this dialogue.
Protecting our planet and fostering green growth
The EU and the US are committed to the Paris Agreement and its effective and strengthened implementation. To provide an effective platform for cooperation in this regard, the leaders committed to establishing an EU-US High-Level Climate Action Group.

We intend to lead by example by becoming net-zero greenhouse gas economies by no later than 2050 and implementing our respective enhanced 2030 targets / Nationally Determined Contributions (NDCs). We resolve to engage with our international partners to achieve an ambitious outcome at the 26th UN Climate Change Conference of the Parties (COP26), making every effort to keep a 1.5-degree limit on global temperature within reach.
EU-US summit statement

The leaders committed to rapidly scaling up technologies and policies that further accelerate the transition away from unabated coal capacity and to an overwhelmingly decarbonised power system in the 2030s, consistent with the EU’s and the US’s respective 2030 NDCs and 2050 net-zero commitments.
The leaders resolved to increase their cooperation on transition towards a climate-neutral, resource-efficient and circular economy. They intend to work towards a Transatlantic Green Technology Alliance that would foster cooperation on the development and deployment of green technologies, as well as to promote markets to scale such technologies.

Climate change: what the EU is doing (background information)

The EU and the US are very determined to halt and reverse biodiversity loss by 2030 and take urgent action to address its drivers. The leaders committed to the goal of conserving or protecting at least 30% of global land and 30% of global oceans by 2030. They share the goal of jointly promoting a successful and ambitious post-2020 global biodiversity framework at the 15th UN Biodiversity Conference of the Parties (COP15). Furthermore, the leaders committed to working together to protect the world’s oceans, including by combating marine litter.
Strengthening trade, investment and technological cooperation
The EU and the US have the largest economic relationship in the world. They are committed to growing their bilateral trade and investment relationship and to upholding and reforming the rules-based multilateral trading system. The leaders said they intended to use trade to help fight climate change, protect the environment, promote workers’ rights, expand resilient and sustainable supply chains and create decent jobs.

Infographic – EU-US trade
See full infographic

We resolve to stand together to protect our businesses and workers from unfair trade practices, in particular those posed by non-market economies that are undermining the world trading system.
EU-US summit statement

To provide an effective platform for cooperation, the leaders established a high-level EU-US Trade and Technology Council (TTC). The TTC’s objectives include:

growing the bilateral trade and investment relationship
avoiding new unnecessary technical barriers to trade
strengthening global cooperation on technology, digital issues and supply chains
cooperating on compatible and international standards development
facilitating regulatory policy
promoting innovation and leadership by US and European firms

Under the TTC, both partners commit to building an EU-US partnership on the rebalancing of global supply chains in semiconductors, with a view to enhancing security of supply in the EU and the US and boosting both partners’ capacity to design and produce the most powerful and resource-efficient semiconductors.
In parallel with the TTC, the EU and the US intend to establish an EU-US Joint Technology Competition Policy Dialogue that would focus on approaches to competition policy and enforcement, and increased cooperation in the tech sector.
The summit also delivered the prospect of resolving long-standing trade disputes.

The leaders welcomed having reached an Understanding on a Cooperative Framework for Large Civil Aircraft, reflecting a new transatlantic relationship in this area.
The leaders also agreed to engage in discussions to allow the resolution of existing differences on measures regarding steel and aluminium before the end of the year

Moreover, the EU and the US are determined to foster a fair, sustainable and modern international tax system and cooperate to reach a global consensus by mid-2021on the question of taxation of multinational companies within the OECD.
The leaders also agreed to work cooperatively on efforts to achieve a meaningful reform of the World Trade Organization (WTO). This involves advancing the proper functioning of the WTO’s negotiating function and dispute settlement system, which will require long-standing issues to be addressed.

EU and US take decisive step to end aircraft dispute (European Commission)

Building a more democratic, peaceful and secure world
Together, the EU and the US are an anchor for democracy, peace and security around the world. They are united in their desire to peacefully prevent and resolve conflicts, uphold the rule of law and international law, and promote human rights for all, gender equity and equality, and the empowerment of women and girls. The two partners intend to support democracy across the globe, including by defending media freedom, advancing a free and open internet, fostering responsible behaviour in cyberspace and tackling disinformation.
The leaders resolved to lead by example at home, and to partner in the Summit for Democracy, committing to concrete actions to defend universal human rights, prevent democratic backsliding and fight corruption.
The EU and the US intend to closely consult and cooperate on the full range of issues regarding China, which include elements of cooperation, competition, and systemic rivalry. They intend to continue coordinating on their shared concerns, including ongoing human rights violations in Xinjiang and Tibet, the erosion of autonomy and democratic processes in Hong Kong, economic coercion, disinformation campaigns and regional security issues.

We remain seriously concerned about the situation in the East and South China Seas and strongly oppose any unilateral attempts to change the status quo and increase tensions. We underscore the importance of peace and stability across the Taiwan Strait and encourage the peaceful resolution of cross-Strait issues.
EU-US summit statement

The EU and the US also intend also to coordinate on their constructive engagement with China on issues such as climate change and non-proliferation, and on certain regional matters.
The EU and the US stand united in their principled approach towards Russia. They are ready to respond decisively to its repeating pattern of negative behaviour and harmful activities. The leaders agreed to establish an EU-US high-level dialogue on Russia to coordinate our policies and actions in this regard.
The leaders also addressed a wide range of other pressing geopolitical, foreign policy and security issues of common concern.
They expressed their determination to continue to stand in support of the sovereignty, independence and territorial integrity of the EU’s Eastern partners, and to support the reform path of Ukraine, Georgia and the Republic of Moldova. They resolved to work towards long-term peace, resilience and stability in the South Caucasus.
The EU and the US stand with the people of Belarus and their demands for human rights and democracy.

We resolve to hold the Lukashenka regime to account for its escalating attacks on human rights and fundamental freedoms, and for endangering aviation safety through the unprecedented and unacceptable forced diversion of an EU passenger airplane under false pretences, and the subsequent arrest of a journalist as part of a continuing assault on opposition voices and the freedom of the press.
EU-US summit statement

Moreover, the EU and the US intend to further strengthen their joint engagement in the Western Balkans, and resolved to work hand-in-hand for sustainable de-escalation in the Eastern Mediterranean, where differences should be settled through dialogue in good faith and in accordance with the international law of the sea. The EU and the US also aim to establish a cooperative and mutually beneficial relationship with a democratic Turkey.
The leaders welcomed the ceasefire in the conflict in the Middle East and expressed their grave concern about the political, human rights, security and humanitarian situation in Ethiopia, Somalia and the Sahel countries, in particular about the growing political and ethnic polarisation throughout Ethiopia that threatens the country’s sovereignty and territorial integrity. The leaders also discussed specific financial and development support for African countries.
They also discussed the situations in the Indo-Pacific, Myanmar, Afghanistan, Latin America and the Caribbean, and in particular Venezuela, and resolved to work together to maintain the Arctic as a region of peace and stability.
The leaders emphasised their support for the ongoing diplomatic efforts and negotiations in Vienna aimed at facilitating the return of the US to the Joint Comprehensive Plan of Action (JCPOA), as well as the full and effective implementation of the deal by Iran and the US.
Finally, the leaders welcomed the EU’s invitation to the US to join the PESCO Military Mobility project as an important step towards a closer EU-US partnership in security and defence. The leaders committed to working towards an Administrative Arrangement for the US with the European Defence Agency, and agreed to work together to raise the level of NATO-EU ambition to further strengthen this mutually reinforcing key strategic partnership.
Compliments of the Council of the EU and the EU Council.
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