The Federal Reserve Board on Tuesday announced an extension through December 31 of its lending facilities that were scheduled to expire on or around September 30. The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover from the COVID-19 pandemic.
The Board’s lending facilities have provided a critical backstop, stabilizing and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments. Each facility was created under section 13(3) of the Federal Reserve Act with the approval of the Treasury Secretary.
The extensions apply to the Primary Dealer Credit Facility, the Money Market Mutual Fund Liquidity Facility, the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, the Term Asset-Backed Securities Loan Facility, the Paycheck Protection Program Liquidity Facility, and the Main Street Lending Program. The Municipal Liquidity Facility is already set to expire on December 31, with the Commercial Paper Funding Facility set to expire on March 17, 2021. Further details on each can be found here.
For media inquiries, call 202-452-2955
Compliments of the U.S. Federal Reserve Board. 

Main results
EU leaders agreed a recovery package and the 2021-2027 budget that will help the EU to rebuild after the pandemic and will support investment in the green and digital transitions.

We have reached a deal on the recovery package and the European budget. These were, of course, difficult negotiations in very difficult times for all Europeans. A marathon which ended in success for all 27 member states, but especially for the people. This is a good deal. This is a strong deal. And most importantly, this is the right deal for Europe, right now.President Michel at the press conference of the European Council

The socio-economic fallout from the COVID-19 crisis requires a joint and innovative effort at EU level in order to support the recovery and resilience of the member states’ economies.
To achieve the desired result and be sustainable, the recovery effort should be linked to the traditional MFF, which has shaped EU budgetary policies since 1988 and offers a long-term perspective.
EU leaders have agreed to a comprehensive package of €1 824.3 billion which combines the multiannual financial framework (MFF) and an extraordinary recovery effort under the Next Generation EU (NGEU) instrument.
Long-term EU budget
The new Multiannual Financial Framework (MFF) will cover seven years between 2021 and 2027. The MFF, reinforced by Next Generation EU, will also be the main instrument for implementing the recovery package to tackle the socio-economic consequences of the COVID-19 pandemic.
The size of the MFF – €1 074.3 billion – will allow the EU to fulfill its long-term objectives and preserve the full capacity of the recovery plan. This proposal is largely based on the proposal made by President Michel in February, which reflected two years of discussions between member states.
The MFF will cover the following spending areas:
single market, innovation and digital
cohesion, resilience and values
natural resources and the environment
migration and border management
security and defence
neighbourhood and the world
European public administration
Long-term EU budget 2021-2027 (background information)
Recovery fund
Next Generation EU will provide the Union with the necessary means to address the challenges posed by the COVID-19 pandemic. Under the agreement the Commission will be able to borrow up to €750 billion on the markets. These funds may be used for back-to-back loans and for expenditure channelled through the MFF programmes. Capital raised on the financial markets will be repaid by 2058.
The amounts available under NGEU will be allocated to seven individual programmes:
Recovery and Resilience Facility: €672.5 billion (loans: €360 billion, grants: €312.5 billion)
ReactEU: €47.5 billion
Horizon Europe: € 5 billion
InvestEU: €5.6 billion
Rural Development: €7.5 billion
Just Transition Fund (JTF): €10 billion
RescEU: €1.9 billion
A recovery plan for Europe (background information and timeline)
Allocation from the Recovery and Resilience Facility (RRF)
The plan ensures the money goes to the countries and sectors most affected by the crisis: 70% under the grants of the Recovery and Resilience Facility will be committed in 2021 and 2022 and 30% will be committed in 2023.
Allocations from the RRF in 2021-2022 will be established according to the Commission’s allocation criteria taking into account  member states’ respective living standards, size and unemployment levels.
Flexibility
EU leaders agreed on a Single Margin Instrument (SMI) to allow the financing of specific unforeseen expenditure in commitments and corresponding payments that could not be financed otherwise. The SMI annual ceiling will be set at EUR 772 million (2018 prices).
They also agreed on three thematic special instruments to provide additional financial means for specific unforeseen events:
Brexit Adjustment Reserve to support the member states and economic sectors hardest hit by Brexit (€5 billion)
European Globalisation Adjustment Fund to support workers who lose their jobs in restructuring events linked to globalisation (€1.3 billion)
Solidarity and Emergency Aid Reserve (SEAR) to respond to emergency situations resulting from major disasters in member states and accession countries, and for rapid response to specific emergency needs within the EU or in third countries (€1.2 billion)
Governance and conditionality
In line with the principles of good governance, member states will prepare national recovery and resilience plans for 2021-2023. These will need to be consistent with the country-specific recommendations and contribute to green and digital transitions. More specifically, the plans are required to boost growth and jobs and reinforce the “economic and social resilience” of EU countries. The plans will be reviewed in 2022. The assessment of these plans will be approved by the Council by a qualified majority vote on a proposal by the Commission.
The disbursement of grants will take place only if the agreed milestones and targets set out in the recovery and resilience plans are fulfilled.
If, exceptionally, one or more member states consider that there are serious deviations from the satisfactory fulfillment of the relevant milestones and targets, they may request that the President of the European Council refer the matter to the next European Council.
Climate action
30% of the total expenditure from the MFF and Next Generation EU will target climate-related projects. Expenses under the MFF and Next Generation EU will comply with the EU’s objective of climate neutrality by 2050, the EU’s 2030 climate targets and the Paris Agreement.
Rule of law
The Union’s financial interests will be protected in accordance with the general principles embedded in the Union Treaties, in particular the values referred to in Article 2 TEU. The European Council also underlines the importance of the respect of the rule of law. Based on this background, a regime of conditionality to protect the budget and Next Generation EU will be introduced.
The European Commission will propose measures in case of breaches for adoption by the Council by qualified majority.
The European Council will quickly revert to the matter.
EU revenue: own resources
EU leaders agreed to provide the EU with new resources to pay back funds raised under Next Generation EU. They agreed on a new plastic levy that will be introduced in 2021. In the same year the Commission is expected to put forward a proposal for a carbon adjustment measure and a digital levy, both of which would be introduced at the latest by 1 January 2023.
The Commission would then come back with a revised proposal on the EU emissions trading scheme (ETS), possibly extending it to the aviation and maritime sectors. There may also be other new resources, such as a financial transaction tax. The proceeds of the new own resources introduced after 2021 will be used for early repayment of NGEU borrowing.
The new sources of finance come on top of existing own resources:
traditional own resources: mainly customs duties and sugar levies (member states will retain, by way of collection costs, 25% of the amounts collected, compared to 20% for 2014-2020)
VAT-based own resource: a uniform rate of 0.3% is applied to the value added tax base of each member state, with the taxable VAT base being capped at 50% of GNI for each country (methodology will be simplified)
GNI-based own resource: resulting from a uniform rate applied to the gross national income of member states, this rate is adjusted every year in order to balance revenue and expenditure (unchanged)
Under the MFF, the ceiling allocated to the EU to cover annual appropriations is fixed at:
for payments: 1.40% of the GNI of all member states
for commitments: 1.46% of the GNI of all member states
Rebates
Lump sum rebates on the annual gross national income-based contribution will be maintained for Denmark, Germany, the Netherlands, Austria and Sweden.
Background
On 10 July, European Council President Charles Michel presented his proposal for the MFF and the recovery package.
President Charles Michel presents his proposal for the MFF and the recovery package (Press release, 10 July 2020)
“The goals of our recovery can be summarised in three words: first convergence, second resilience and third transformation. Concretely, this means: repairing the damage caused by COVID-19, reforming our economies and remodelling our societies,” he said.
Following bilateral discussions with EU leaders, President Michel identified six ‘building blocks’ for a possible agreement.
On 19 June, EU leaders exchanged views, via video conference, on the proposal for a new recovery plan and for the multiannual financial framework (MFF) for 2021-2027, presented by the European Commission on 27 May 2020.
Following the meeting, Charles Michel, President of the European Council, started political negotiations with EU leaders.
Video conference of the members of the European Council, 19/06/2020
On 23 April 2020, the European Council decided to work towards establishing a recovery fund to respond to the COVID-19 crisis. Leaders tasked the European Commission with putting forward a proposal urgently, and also clarifying the link between the recovery fund and the EU’s long term budget.
Video conference of the members of the European Council, 23 April 2020
A recovery plan for Europe (background information and timeline)
Long-term EU budget 2021-2027 (background information)
Compliments of the European Council, Council of the European Union.

Press release by the European Commission and the German Presidency of the Council of the EU |
Today, EU Member States, with the support of the European Commission and ENISA, the EU Agency for Cybersecurity, published a report on the progress made in implementing the joint EU toolbox of mitigating measures, which was agreed by the Member States and endorsed by a Commission Communication in January 2020. The toolbox sets out a joint approach based on an objective assessment of identified risks and proportionate mitigating measures to address security risks related to the rollout of 5G, the fifth-generation of mobile networks.
While work is still ongoing in many Member States, the report notes that all Member States have launched a process to review and strengthen security measures applicable to 5G networks, demonstrating their commitment to the coordinated approach defined at EU level. For each of the toolbox measures, the report reviews progress made since the toolbox adoption, showing what has already been done and identifying areas where measures have not been implemented so far.
Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, said: “The timely rollout of 5G networks is strategically important for all Member States as it can open new opportunities for businesses, transform our critical sectors and benefit European citizens. Our common priority and responsibility is to ensure that these networks are secure and, while this report shows we have undergone great strides, a lot of work remains ahead.”
Thierry Breton, Commissioner for the Internal Market, added: “With 5G network rollout going ahead across the EU, and our economies increasingly relying on digital infrastructure, as the coronavirus crisis demonstrated, it is more important than ever to ensure a high level of security. Together with Member States, we are committed to put in place robust measures, in a coordinated manner, not only to ensure 5G cybersecurity but also to strengthen our technological autonomy. Today’s report reaffirms our commitment and outlines the areas where further efforts and vigilance are needed.”
German Federal Minister for Economic Affairs and Energy, Peter Altmaier, said: „The 5G network rollout will provide completely new opportunities for business and society. Due to the importance of 5G as a central critical infrastructure for future technologies, it is important that the rollout of 5G infrastructure can proceed quickly and safely – in all member states. The 5G toolbox report shows that we are on the right track.“
Horst Seehofer, German Federal Minister of the Interior, Building and Community said: “The integrity of telecommunication networks is an essential part of the security architecture in all Member States. All risks – technical as well as non-technical – must be contained as much as possible. The progress report on the EU’s 5G toolbox demonstrates that the common approach is the right way to synchronise national measures as far as possible.“
Ensuring resilience of 5G networks is essential to our society, since this technology will not only have an impact on digital communications, but also on critical sectors such as energy, transport, banking, and health, as well as on industrial control systems. 5G networks will be carrying sensitive information and will be supporting safety systems that will come to rely on them. Market players are largely responsible for the secure rollout of 5G, and Member States are responsible for national security – yet, collective work and coordinated implementation of appropriate measures is fundamental to ensure EU businesses and citizens can make full use of all the benefits of the new technology in a secure way.
Indeed, the toolbox implementation is the result of collective work and of the strong determination by all Member States, together with the Commission and ENISA, to cooperate and respond to the security challenges of 5G networks and to assure the continued openness of the digital single market. In the toolbox, Member States agreed to strengthen security requirements through a possible set of recommended measures, in particular to assess the risk profiles of suppliers, to apply relevant restrictions for suppliers considered to be high risk (including necessary exclusions for key assets considered as critical and sensitive, such as the core network functions), and to have strategies in place to ensure the diversification of vendors.
Main insights of the report on the EU 5G toolbox
Today’s report analyses the progress made in implementing the toolbox measures at national level, coming to a set of conclusions.
Good progress has already been achieved for some of the toolbox measures, namely in the following areas:
The powers of national regulatory authorities to regulate 5G security, have been or are in the process of being reinforced in a large majority of Member States, including powers to regulate the procurement of network equipment and services by operators.
Measures aimed at restricting the involvement of suppliers based on their risk profile are already in place in a few Member States and at an advanced stage of preparation in many others. The report calls on other Member States to further advance and complete this process in the coming months. With regards to the precise scope of these restrictions, the report highlights the importance to look at the network as a whole and address core network elements as well as other critical and highly sensitive elements, including management functions and the radio access network, and of imposing restrictions also on other key assets, such asdefined geographical areas, government or other critical entities. For those operators having already contracted with a high risk vendors,transition periods should be put in place.
Network security and resilience requirements for mobile operators are being reviewed in a majority of Member states. The report stresses the importance to ensure that these requirements are strengthened, that they follow the latest state-of-the-art practices and that their implementation by operators is effectively audited and enforced.
On the other hand, some measures are at a less advanced stage of implementation. In particular, the report calls for:
Progress is urgently needed to mitigate the risk of dependency on high-risk suppliers, also with a view to reducing dependencies at Union level. This should be based on a thorough inventory of the networks’ supply chain and implies monitoring the evolution of the situation.
Challenges have been identified in designing and imposing appropriate multi-vendor strategies for individual MNOs or at national level due to technical or operational difficulties (e.g. lack of interoperability, size of the country)
As regards the screening of Foreign Direct Investments, steps should be taken to introduce national FDI screening mechanism without delay in 13 Member States where it is not yet in place, including in view of the approaching application of the EU investment screening framework as of October 2020. These screening mechanisms should be applied to investment developments potentially affecting the 5G value chain, taking into account the objectives of the Toolbox.
Going forward the report also recommends that Member States authorities:
Exchange more information about the challenges, best practices and solutions for implementing the Toolbox measures;
continue monitoring and evaluating the implementation of the Toolbox;
and, continue working with the Commission to implement EU-level actions listed in the toolbox, including in the area of standardisation and certification, trade defence instrumentsand competition rules to avoid distortions in the 5G supply market. Also, investing in EU capacities in the 5G and post-5G technologies, and ensuring 5G projects supported with public funding take into account cybersecurity risks.
Next Steps
The Commission will continue to work with Member States and ENISA within the framework of the NIS Cooperation Group, to monitor the implementation of the toolbox and to ensure its effective and consistent application. The Group will also promote the alignment of national approaches, through further exchanges of experiences, and by working with the Body of European Regulators for Electronic Communications (BEREC). As part of the implementation of the Commission Recommendation adopted last year, by 1 October 2020, Member States, in cooperation with the Commission, should assess the effects of the Recommendation and determine whether there is need for further action. This assessment should take into account the outcome of the EU coordinated risk assessment that was published in October 2019 as well of the effectiveness of the toolbox measures.
Background
In March 2019, following a call by the European Council for a concerted approach to the security of 5G, the Commission adopted a Recommendation on Cybersecurity of 5G networks. It called on Member States to complete national risk assessments, review national measures and to work together at EU level on a coordinated risk assessment and a common toolbox of mitigating measures.
Based on the Member States’ national risk assessment the Report on the EU coordinated risk assessment of the cybersecurity of 5G networks, presented in October 2019, identified the main threats and threats actors, the most sensitive assets, the main vulnerabilities and a number of strategic risks.
To complement this report and as a further input for the toolbox, ENISA carried out a dedicated threat landscape mapping, consisting of a detailed analysis of certain technical aspects, in particular the identification of network assets and of threats affecting these.
In January 2020, the Member States, acting through the NIS Cooperation Group, adopted the EU Toolbox of risk mitigating measures. The Commission adopted a Communication, on that same day, in which it endorsed the toolbox underlining the importance of its effective and quick implementation, and called on Member States to prepare a report on its implementation by 30 June 2020, which was therefore published today.
Compliments of the European Commission

The Federal Reserve Board on Friday finalized a rule that implements technical, clarifying updates to its Freedom of Information Act (FOIA) procedures and changes to its rules for the disclosure of confidential supervisory information (CSI), which is supervisory information belonging to the Board that may include proprietary financial institution-specific information. The final rule is generally similar to the proposal from June 2019, with a few changes in response to public comments.
The final rule updates the Board’s FOIA regulation to be consistent with the Board’s current practices and to incorporate recent changes in law and guidance. Some of these changes include updating definitions for expedited processing and the different categories of requesters. The revisions also clarify terms and help users more easily navigate the process of filing a FOIA request.
The final rule provides clarifying revisions to the definition of CSI, and, like the proposal, does not expand or reduce the information that falls within the current definition of CSI. The final rule also updates certain outdated and inefficient restrictions governing the disclosure of CSI. For example, the final rule allows supervised financial institutions to share CSI with all affiliates, rather than only with their parent bank holding companies. In a change from the proposal, the final rule will allow financial institutions to share CSI with service providers without obtaining Reserve Bank approval.
The final rule is effective 30 days after publication in the Federal Register.
For media inquiries, call 202-452-2955
Federal Register notice (PDF)
Compliments of U.S. Federal Reserve.

Consultation launched to seek feedback on the publication of compounded €STR rates by the ECB
Comments by interested stakeholders to be received by 11 September 2020
The European Central Bank (ECB) is considering the publication of compounded term rates based on the euro short-term rate (€STR) and solicits views of the public on this matter by launching a public consultation. The publication would take place on a daily basis shortly after the €STR publication. Published maturities could range from one week up to one year. A daily index, making it possible to compute compounded rates over non-standard periods, is also envisaged as part of the publication.
The public consultation, which asks for the public’s views on specific characteristics of the compounded rate, has been launched today and will expire on 11 September 2020 at 18:00 CET. Interested stakeholders are invited to respond using the template provided by the ECB. An anonymised summary of all the views expressed will be published following the solicitation period.
CONTACT:
William Lelievldt, william.lelieveldt[at]ecb.europa.eu | +49 69 1344 7316.
Compliments of the ECB.

With the help of our members, we are creating a Thought-Leadership series on the impact of COVID-19 on Labor & Employment from the perspective of both sides of the Atlantic. Today, we present Philip Berkowitz, Shareholder at Littler Mendelson in New York, and Ronnie Neville, Partner at Mason Hayes & Curran in Dublin, who will address “Working from Home and the Challenges of Remote Supervision.” |
Whether in Europe or America, there are advantages and disadvantages to working from home, both for employers and employees.  For employees, benefits include greater flexibility around how to manage the working day, and significant savings in time and cost with no longer having to commute to work (not to mention the removal of associated stress. For employers—and particularly those who had considered, pre-pandemic, that working from home was not a viable option—the benefits have included the ability to retain employees, flexibility in hours and schedules, and the ability to reassess the need to maintain costly office space.
However, employers and remote workers also face different (and for many, new) challenges that come with remote working, which include a very different dynamic, and sometimes more difficult relationship, between a subordinate and his or her manager who is supervising remotely. Certain roles appear better suited to remote working, and the more senior in tenure an employee is, the easier it may be for them to work remotely and for their manager to supervise remotely.
This new normal of interacting with colleagues, whether they are peers, subordinates, or at a higher level in the corporate hierarchy, presents challenges to employer and employee alike.  After all, getting the job done requires effective engagement with co-workers as well as customers, clients, and other third parties.  Deprived of in-person interaction, people may feel, at least initially, that they are less able to learn and to teach, to persuade and riposte, to effectively present their abilities, and to gain wisdom from colleagues.
According to the International Labour Organisation (“ILO”), more than 1 in 6 people age 18–29 stopped working during the first few months of the pandemic, and younger workers’ hours have fallen by up to 23%. The “lockdown generation” risks a decline in their skills, productivity and mental health.
New hires, many of whom may not have set foot in the physical workplace, may inevitably lose out in various ways, deprived of experiencing the organisation’s culture in a traditional office setting. It also appears that new hires, and often-younger workers, may have more difficulty with remote supervision than many more experienced or senior peers.
Many graduates starting out in their career will now have an unusual start to their first professional jobs.  Having been on-boarded remotely and working entirely from home, they will miss out, at least initially,  on the traditional in-office learning environment and the intangible benefits that come from face to face interaction with peers and managers.  This will curtail the opportunity to develop a professional network and to foster relationships with peers and senior staff/managers, which is crucial to career advancement.
Employers, too, may lose the opportunity to get to know their new employees in quite the same way as they did those with whom they worked in a physical setting.
However, the pandemic is of course negatively affecting employees regardless of their age.  Many have lost their jobs; they have suffered pay cuts and lost opportunities; and, for older workers in particular, the challenge of finding a new job in a new work culture may be particularly daunting.
Supervision and direction
Managers supervise and manage their teams in different ways, depending on their individual styles.  Many managers are quite hands-on.  This can be a very effective way of transferring knowledge and abilities, and can allow for ongoing, continual assessment of job performance, which can be beneficial to employee and manager.  On the other hand, of course, micro managing can be oppressive and may discourage individual thinking.
At the other extreme, some managers adopt a laissez faire approach to management and supervision.  While this approach may inspire confidence and creativity, many employees require supervision and direction, and so it can deprive employees of the ability to learn and grow, and result in wasted time, effort and frustration.
Many managers have introduced new and demanding protocols for the review of work product.  These protocols may be non-traditional and often have not been vetted, either by the organization as a whole or by the trial-and-error of good experience.  Most employers have been challenged by the need to monitor work remotely and principally through technology, and some have introduced technological aids such as mouse tracking software and video recording.
These practices may cause problems of trust and suspicion, and carry with them the risk of damaging the organization’s culture, as well as giving rise to potential legal and/or data privacy risks.
In addition to cultural challenge, different approaches to supervision can affect the employer’s ability to comply with important employment and labor law obligations.  For example, employers must be sure that their managers monitor the workload and worktime of subordinates.  Employers must pay employees for the hours they work; employees must abide by Company policies that may limit the number of hours they may work, and take their proper rest breaks and holidays.  Hindrances on the ability to monitor these compliance issues can heighten the risk of labor law violations.
In addition to legal restrictions on time, many employees have been as busy, if not more busy, during the Covid-19 pandemic and, for some who have been left to their own devices, there is a risk of over-working and potentially, burnout.
The practical limitations faced by managers who are unable to supervise staff as they would in the traditional way in a regular office setting is resulting in considerable angst for some employers and employees.
Perhaps paradoxically, some employers have seen an increase in day-to-day conflict among employees, no doubt caused, in part, by the difficulty in communicating.  When we are left to email or texting as the way to convey thoughts, misunderstandings can be frequent.  This is particularly the case when manager and subordinate work on different schedules, and if there is already tension in a relationship, this can be heightened by the current environment.
The future
It is clear that most businesses will not revert fully to the traditional way of working and that remote working is being, and will be, embraced more readily.  Achieving the right balance in the supervision and direction of staff, but also, in their integration and development, particularly new joiners, will take time to perfect.   For the future of work, organisations and managers will need to continue to adapt, develop and improve their methods and systems for the management of employees working from home.
Employers will be challenged to re-engage their workforce.  We will all be returning to something different, and employees may have a fear of the unknown—not to mention of what may be the next wave of the virus.  Employees who have grown used to the safety of their homes may be uncomfortable working again in an open environment, close to other employees.
Employees may also be facing bereavement as a result of illness in their family or among friends, and unprecedented financial insecurity.  This can result in polarization in the workforce.
Employers will need to build appropriate feedback channels, be prepared to accommodate employees who are anxious or find the new work environment challenging, and to communicate transparently.
There is no question, though, that remote work is indeed part of the new normal.  Companies have surprised themselves by, overall, adapting effectively to this new environment of working.  Much of corporate America is indeed in no rush to return employees to their offices, and (as the New York Times put it in a recent article), are racing not to be the first back, but the last.  “White-Collar Companies Race to Be Last to Return to the Office” (New York Times, May 8, 2020).
In light of the likelihood that remote work is here to stay, employers will need to identify structures that will require change.  They will need to strengthen remote work policies, and provide training to managers in effective supervision and communication.
Employers will also need to reassess their compensation plans, performance planning and goal setting.  There will undoubtedly be the need in many cases to restructure the workplace in light of this new way of working
Employers will also be challenged re-engage with employees, and to retain talent in this changed landscape.  They will need to identify new benefits that may have been made essential by remote work, such as childcare, elder care, alternative transportation options, and flexible work arrangements.
Employees and employers may have confounded expectations and demonstrated that they can work in this new environment, but the challenges will be frequent, different, and perhaps unpredictable.
AUTHORS:
Philip Berkowitz, Shareholder at Littler Mendelson, New York
pberkowitz@littler.com | +1 212 497 8481
Ronnie Neville, Partner at Mason Hayes & Curran, Dublin
rneville@mhc.ie | +353 1 614 5011
Stay tuned for more on this series! We hope you enjoy these Thought-Leadership pieces written by our members.

Statement made July 23, LONDON |
Ladies and gentlemen,
Good afternoon to all of you.
I am happy to meet you here in Europe House in London, at the end of this sixth negotiation round. I would like to thank the EU Delegation, and our Ambassador João Vale de Almeida for welcoming us.Thank you also for the very useful work you do, representing the EU in the UK, together with the 27 EU Ambassadors, whom I met yesterday. This negotiation takes place in the middle of a very serious health, economic and social crisis across Europe and the world. This crisis gives us a duty to act responsibly and to work for an agreement limiting the negative consequences of Brexit. This is also why the agreement found this week in the European Council is so important. EU leaders, including Presidents Ursula von der Leyen and Charles Michel, showed responsibility and EU unity in agreeing on a budget for the next 7 years and on a very ambitious recovery plan. The European Parliament is debating this today.
Ladies and gentlemen,
Let me begin with a few words on the context of this round. At the High-Level Meeting with Presidents Ursula von der Leyen, David Sassoli and Charles Michel in June, Prime Minister Boris Johnson told us that he wanted to reach a political agreement quickly.
The Prime Minister also stated three red lines:
no role for the European Court of Justice in the UK;
the right to determine future UK laws without constraints and;
an agreement on fisheries that shows that Brexit makes a real difference compared to the existing situation.
Ladies and gentlemen,
What Boris Johnson says and writes matters to the EU. Therefore, following the High-Level Meeting, we agreed to intensify our discussions. We have tried to understand how these three red lines can be squared with our commitment to a comprehensive new partnership – as set out in the Political Declaration, signed by Prime Minister Johnson on 17 October last year. Because of course, any international agreement implies constraints on both Parties. We have continued to engage sincerely and constructively, in line with the mandate given to us by the Member States, with the support of the European Parliament. However, over the past few weeks, the UK has not shown the same level of engagement and readiness to find solutions respecting the EU’s fundamental principles and interests. This week, we have had useful discussions on some issues in goods and services. But these negotiations are complex and require us to make progress across all areas. And we are still far away. This week, discussions took place in a positive atmosphere, and I want to thank David Frost and his team, as well as the EU team, for their professional approach.
It has allowed us to make some progress:
We had useful discussions to narrow our divergences in the areas of social security coordination and Union programmes.
We made progress towards the objective of a comprehensive and single institutional framework, which must include robust enforcement mechanisms.
And we had good discussions on police and judicial cooperation, even if divergences remain.
On two important subjects, transport and energy, we had intense and useful discussions. However, the UK continued to request single market-like benefits.
In addition, there is still no progress on two essential topics of our economic partnership.
First, there must be robust guarantees for a level playing field – including on State aid and standards – to ensure open and fair competition among our businesses, also over time. This is a core interest for all 27 Member States – and in my view also for the UK.
Second, we have to agree on a balanced, sustainable and long-term solution for fisheries, with the interests of all Member States concerned in mind, and not least the many men and women whose livelihoods depend on it on both sides.
These two points should not come as a surprise. We have been saying the same thing since the beginning of the negotiations – not only this year, but consistently over the last three years. These points are mentioned explicitly in the Political Declaration – a rather precise text. They were part and parcel of our political engagement with Prime Minister Boris Johnson eight months ago. We are simply asking to translate this political engagement into a legal text. Nothing more.
Once again, what the Prime Minister writes and says matters to us.
On the two points I mentioned – the level playing field and fisheries – this week again, the UK did not show a willingness to break the deadlock.
1/ On the level playing field, the UK still refuses to commit to maintaining high standards in a meaningful way.
On State aid, despite the clear wording of the Political Declaration, we have made no progress at all. This is all the more worrying because we have no visibility on the UK’s intention on its future domestic subsidy control regime. We respect the UK political debate but the time for answers is quickly running out.
On important areas such as climate, environment, labour or social law, the UK refuses effective means to avoid undercutting by lowering standards. The UK wants to regain its regulatory autonomy. We respect that. But can the UK use this new regulatory autonomy to distort competition with us? We have to answer this question as we commit to a new economic partnership.
We want to trade with the UK free from tariffs, free from quotas, but also free from unfair competition. And I am sure UK businesses want that too. The UK tells us it needs certainty for its businesses. But that cannot be at the price of long term uncertainty and disadvantage for our businesses in the EU.
We respect the UK government’s political choice and we are ready to work on solutions. But the EU cannot and will not accept to foot the bill for the UK’s political choices. And let me be very clear: A less ambitious agreement on goods and services will not lead the EU to drop its demands for a robust level playing field.
2/ On fisheries, the UK is effectively asking for a near total exclusion of EU fishing vessels from UK waters.
That is simply unacceptable. The UK will be an independent coastal state, and the EU fully respects that. We also recognise that, under the future agreement, there may be change to the benefit of UK fishermen. But common stocks need to be managed jointly – according to international law and the principle of responsible and sustainable management of resources. And any agreement cannot lead to the partial destruction of the EU fishing industry. I repeat: we have to agree on a balanced, sustainable and long-term solution for fisheries protecting the many men and women whose livelihoods depend on it.
The EU has always insisted that an economic partnership with the UK must include robust level playing field rules and an equitable agreement on fisheries. This means that, by its current refusal to commit to conditions of open and fair competition and to a balanced agreement on fisheries, the UK makes a trade agreement at this point unlikely.
Ladies and gentlemen,
Until the very last day of this negotiation and despite the current difficulties, the EU will remain engaged, constructive and respectful. In any case, the UK has chosen to leave the Single Market and the Customs Union on 1 January 2021 – in little more than five months. This will bring inevitable changes.
On our side, we are getting ready.
We have published a Communication to help EU citizens, businesses and public administrations prepare for the end of the transition period.
EU leaders have agreed this week on a 5 billion euro special instrument – the “Brexit Adjustment Reserve” – to counter unforeseen and adverse consequences in Member States and sectors that are worst affected by Brexit.
In parallel, we have so far published over 70 sector specific notices: they explain in detail what actions must be taken in each sector to be ready for the end of the transition period. These notices are mandatory reading for stakeholders. They are available on our UK task force webpage.
But if we do not reach an agreement on our future partnership, there will be far more friction. For instance, on trade in goods, in addition to new customs formalities, there will be tariffs and quotas. This is the truth of Brexit. And I will continue to tell the truth. If we want to avoid this additional friction, we must come to an agreement in October at the latest, so that our new treaty can enter into force on 1 January next year. This means that we only have a few weeks left, and that we should not waste them.
Let me also remind you that we only have little time left to properly implement the Withdrawal Agreement. Together with Vice-President Maroš Šefčovič, we continue to follow closely the implementation by the UK of its commitments under the Protocol on Ireland and Northern Ireland. In this context, EU leaders have also agreed on Monday to allocate 120 million euro to the PEACE PLUS programme in support of peace and reconciliation and of the continuation of North-South cross border cooperation.
The recent Specialised Committee on the Protocol was a useful occasion to take stock of progress. I would like to thank Michael Gove and his team for their engagement. But we remain concerned that the necessary measures will not be in place on 1 January. Let me remind you that there is no grace period for the proper implementation of this Protocol.
We also remain vigilant, together with the 27 EU governments and the European Parliament, to guarantee the rights of British nationals covered by the Withdrawal Agreement. In the same way, we expect the rights of EU citizens here in the UK to be safeguarded.
Ladies and gentlemen,
Today in London, I want to reaffirm the EU’s willingness to reach an ambitious partnership agreement in all areas including, even later on, in external security and defense. This is also the wish of Presidents Ursula von der Leyen and Charles Michel, the European Parliament and the 27 Heads of State or government. I continue to believe that Prime Minister Boris Johnson and the UK government want to find an agreement with the EU. Because it is in our common interest to cooperate and to address the many and serious challenges of today: climate change and biodiversity, health and security, research and innovation, democracy and fundamental rights, the fight against poverty and financial stability. If I may borrow a famous line from Saint-Exupéry, negotiation is not just to look or to speak at one another. It is to look together in the same direction. I will be back in London with my team next week as planned. A new round is foreseen mid-August. Work continues. Our resolve remains unchanged.
Compliments of the European Commission

The European Commission has today adopted a Capital Markets Recovery Package, as part of the Commission’s overall coronavirus recovery strategy. On 28 April, the Commission had already proposed a Banking Package to facilitate bank lending to households and businesses throughout the EU. Today’s measures aim to make it easier for capital markets to support European businesses to recover from the crisis.  The package proposes targeted changes to capital market rules, which will encourage greater investments in the economy, allow for the rapid re-capitalisation of companies and increase banks’ capacity to finance the recovery.
Valdis Dombrovskis, Executive Vice-President for an Economy that works for the people said: “We are continuing with our efforts to help EU citizens and businesses during the coronavirus crisis and the subsequent recovery. One way of doing so is to help businesses raise capital on public markets. Today’s targeted amendments will make it easier for our businesses to get the funding they need and to invest in our economy. Capital markets are vital to the recovery, because public financing alone will not be enough to get our economies back on track. We will present a wider Capital Markets Union Action Plan in September.”
The package contains targeted adjustments to the Prospectus Regulation, MiFID II and securitisation rules. All of the amendments are at the heart of the Capital Markets Union project aimed at better integrating national capital markets and ensuring equal access to investments and funding opportunities across the EU.
Targeted amendments to the prospectus regime – EU Recovery Prospectus: Easy to produce – Easy to read – Easy to scrutinise
A prospectus is a document that companies need to disclose to their investors when they issue shares and bonds. The Commission is today proposing to create an “EU Recovery Prospectus” – a type of short-form prospectus – for companies that have a track record in the public market. This temporary prospectus would be easy to produce for companies, easy to read for investors, and easy to scrutinise for national competent authorities. It would cut down the length of prospectuses from hundreds of pages to just 30 pages. This will help companies to raise capital – such as shares – instead of going deeper into debt. A second set of targeted amendments to the Prospectus Regulation aims at facilitating fundraising by banks that play an essential role in financing the recovery of the real economy.
Targeted amendments to the MiFID II requirements for European firms
The Commission is today proposing to make some targeted amendments to MiFID II requirements, in order to reduce some of the administrative burdens that experienced investors face in their business-to-business relationships. Lesser-experienced investors (such as households investing their savings for retirement) will remain just as protected as before. These amendments refer to a number of requirements that were already identified (during the MiFID/MiFIR public consultation) as being overly burdensome or hindering the development of European markets. The current crisis makes it even more important to alleviate unnecessary burdens and provide opportunities to nascent markets. The Commission therefore proposes to recalibrate requirements to ensure that there is a high level of transparency towards the client, while also ensuring the highest standards of protection and acceptable compliance costs for European firms. In parallel, the Commission has today opened a public consultation on amendments to the MiFID II delegated directive to increase the research coverage regime for small and mid-cap issuers and for bonds. In particular, SMEs need a good level of investment research to give them enough visibility to attract new investors.  We are today also proposing to amend the MiFID rules affecting energy derivatives markets. This is intended to help the development of euro-denominated energy markets – important for the international role of the euro – as well as allow European companies to cover their risks, while safeguarding the integrity of commodity markets, especially for agricultural products.
Targeted amendments to securitisation rules
The Commission is today proposing a package of measures amending the Securitisation Regulation and the Capital Requirements Regulation. Securitisation is a tool through which banks can bundle loans, turn them into securities, and sell them onto capital markets. The aim of these changes is to facilitate the use of securitisation in Europe’s recovery by enabling banks to expand their lending and to free their balance sheets of non-performing exposures. It is helpful to let banks transfer some of the risk of SME (small and medium-sized enterprises) loans to the markets so that they can keep lending to SMEs. In particular, the Commission proposes creating a specific framework for simple, transparent and standardised on-balance-sheet securitisation that would benefit from a prudential treatment reflecting the actual riskiness of these instruments. In addition, the Commission proposes to remove existing regulatory obstacles to the securitisation of non-performing exposures. This can help banks offload non-performing exposures that can be expected to grow because of the coronavirus crisis. Today’s changes are based on extensive work and analysis carried out by the European Banking Authority in 2019 and 2020.
For more information
Link to today’s package
Questions and Answers
Compliments of the European Commission.

In an extraordinary plenary session, MEPs commented on the 17-21 July European Council deal on EU financing and the recovery plan to tackle the pandemic fallout.

In the debate with Council and Commission Presidents Charles Michel and Ursula von der Leyen, the deal reached at the recent European Council meeting on the recovery fund was qualified as “historic” by many MEPs as for the first time, member states have agreed to issue €750 billion of joint debt. With cuts made to the long-term budget (multiannual financial framework, MFF) however, most were “not happy”.
“We are not ready to swallow the MFF pill”, said Manfred Weber (EPP). Also, S&D leader Iratxe García would not accept the cuts, “not at a time when we need to strengthen our strategic autonomy and reduce disparities between Member states”.
Many highlighted that the question of reimbursing the debt was not resolved. MEPs insisted that the burden must not fall on the citizens, and that a robust system of new own resources including a digital tax or levies on carbon for the repayment must be guaranteed, with a binding calendar. Furthermore, many underlined that “the EU is not a cash machine for national budgets”, deploring that “frugal” countries do not want to pay the price for benefiting from the single market, and insisting that no funds should go to “pseudo-democratic” governments which do not respect the rule of law and EU values.
Others were more sceptical about new own resources generating enough to repay all the debt and warned that the crisis should not be used as a pretext for further EU integration. Most however stressed that Parliament is ready for swift negotiations to make the necessary improvements to the Council’s common position.
MEPs now vote on a resolution to wind up the debate, which will serve as a mandate for the upcoming negotiations with the German Presidency of the Council of the EU. The result of the final vote will be announced in plenary today at 17.30.
Click on links to view individual statements
Charles Michel, President of the European Council
Ursula von der Leyen, President of the European Commission
Manfred Weber (EPP, DE), Iratxe García Pérez (S&D, ES), Dacian Cioloș (RE, RO), Nicolas Bay (ID, FR), Philippe Lamberts (Greens/EFA, BE)
Robert Zīle (ECR, LV), Martin Schirdewan (GUE/NGL, DE)
Closing remarks by Charles Michel, President of the European Council
Compliments of the European Parliament.