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Tag: 2022

  • PRESS RELEASE : British government must end reckless threats – John Finucane [October 2022]

    PRESS RELEASE : British government must end reckless threats – John Finucane [October 2022]

    The press release issued by Sinn Fein on 23 October 2022.

    Sinn Féin MP John Finucane has said the British government must end the reckless threats, stop fuelling instability and work with the EU to find solutions.

    Responding to comments by British government Minister Steve Baker on the media this morning, the North Belfast MP said:

    “Comments by Steve Baker this morning are a reiteration of the reckless Tory threats that have fuelled instability and caused damage on the international stage.

    “Whoever leads the incoming British government must make the restoration of the Assembly and Executive an immediate priority and end the cycle of pandering to the DUP.

    “People are struggling with huge energy bills and patients are suffering on chronic hospital waiting lists. They need an Executive formed now to help them.

    “The outcome of May’s Assembly election must be respected. People voted for real change and an Executive that will work together in their best interests, not a government on the DUP’s terms only.

    “Sinn Féin is ready to form an Executive today that will put money in people’s pockets to deal with the cost-of-living crisis and start to fix the health service.

    “The new British government must ensure that the Protocol continues to create jobs and investment by protecting our businesses from the damage of Brexit.

    “And they must end the reckless threats and continue to work constructively with the EU to find solutions for our businesses who need certainty not instability.“

  • PRESS RELEASE : Growth and competitiveness − speech by Sam Woods [October 2022]

    PRESS RELEASE : Growth and competitiveness − speech by Sam Woods [October 2022]

    The press release issued by the Bank of England on 27 October 2022.

    Sam Woods sets out how independent regulators can support the UK as a global financial centre.

    It’s a great pleasure to be here in the Egyptian Hall again – thank you Lord Mayor for hosting us. I’m afraid my remarks are even less amusing than they usually are when I inflict this annual speech on you all. But that’s because tonight’s topic is deadly serious.

    I want to use this speech to talk about how prudential regulation can contribute to the competitiveness of the United Kingdom as a financial centre, and to long-term economic growth. My argument can be boiled down to three points:

    • First, financial stability is the single most important ingredient of competitiveness in financial services. Delivering that stability must remain the core purpose of prudential regulation here in the UK.
    • Second, there is a good case for Parliament to require the regulators to place more weight on growth and competitiveness as part of post-Brexit reforms in which our role as a rulemaker is expanded. If Parliament agrees to make that change we are ready to embrace it.
    • Third, there are good ways of making that change and bad ways of making it. We fully support the Financial Services and Markets Bill as introduced to Parliament, because it strikes a sensible balance between the competing considerations at play.

    Regulation versus growth?

    Too much debate on this topic is premised on a simplistic trade-off between regulation and growth. In that view of the world, the way to promote growth is simply to de-regulate: either by releasing capital that would otherwise be tied up in prudential requirements, or by cutting through red tape to reduce compliance costs.

    A related view says that you can become a global financial centre by watering down standards, to attract international business with the promise of lighter regulatory burdens.

    Badly designed regulations can indeed reduce a country’s relative attractiveness as a place to do business, and should be removed or reformed. We have of course inherited some such rules from our time as a member of the EU, and probably also some that we have devised ourselves without any help from Brussels. The Financial Services and Markets (FSM) Bill before Parliament will require us to focus more on this aspect of regulation, which we are ready and willing to do.

    However, it may also be true that if you saw the keel off a yacht, for a little while and in light winds it may go a bit faster. Despite this, there are probably more sensible ways for sailors to make themselves more competitive, particularly if they want to compete globally and be able to navigate heavy weather without drowning.

    My point is that a well-designed regulatory regime supports economic growth, and that a credible regulatory framework is a necessary precondition for hosting a very large global financial centre. There is a balance to be struck here: on the one hand, to do its job here in the UK prudential regulation must be robust, global and independent; on the other, it must be proportionate and suitably open to innovation. Having left the EU it is right that we strike a balance that works for the UK and contributes to global financial stability, but we should do this with care and avoid suddenly all rushing to one side of the boat.

    Robust

    The single largest contribution prudential standards can make to economic growth is by reducing the frequency and severity of financial crises. It is absolutely clear from the history of financial crises that in order to achieve this to any tolerable degree prudential regulation must be robust. It took many years for the UK economy to recover from the 2008 financial crash – but in contrast, the stronger regulation we’ve put in place since 2008 has allowed us to navigate more recent severe shocks such as those resulting from the energy and Covid crises.[1]

    Now of course you would expect me to make that point. But the case for robust standards is about more than just avoiding crises. Strong financial regulation also promotes economic growth in a subtler way. It helps to create a high trust environment where you can do business without constantly being worried about your counterparties falling over. This brings down risk premia in the financial sector – reducing the cost of lending for households and businesses, and promoting productive investment – and makes the UK an attractive place in which to do international business.

    This gets to an important point: the world’s largest financial centres are not places with low standards. They are places with high, consistent standards, where you can do business with confidence. Any attempt to become a global financial centre by competitively de-regulating would be self-defeating by its nature: major international financial institutions want a safe harbour, not a wild west.

    It may be possible to become a regional centre of offshore finance by undercooking regulation. Some such minor centres exist. But I see no reason why the UK would seek that status. We are already, by some measures, the leading global centre of international finance. We should not be complacent about that status – but we should be clear that our reputation for strong regulation is an asset, not a liability. You don’t get to the top by racing to the bottom.

    Global

    Well-designed regulation must also be global. By this I mean a couple of things.

    First, adherence to globally agreed standards.[2] Having a consistent rulebook across jurisdictions makes it far easier to do cross-border business, and allows international centres like London to host global business.

    Being seen as a good citizen also enhances the credibility and reliability of the UK as a place to be based. And make no mistake: the world is watching. In a recent report on the United Kingdom’s financial sector, the IMF described UK financial stability as a global public good.[3]

    Second, a global approach means openness to international business, and establishing a level playing field on which firms from different home jurisdictions can compete. As part of this, we should avoid disadvantaging our own firms with needless ‘gold plating’ of international standards. At the same time, we are open, indeed welcoming to overseas firms that want to operate here. They can do so with confidence that the playing field is level and the referee is unbiased.

    Again, I want to emphasise that the UK is already well ahead of the game on this score. We host 91 branches of international banks with total assets of £8.4 trillion. The IMF said this ‘puts the UK in a category by itself as a large host of international activity’ and we are ‘largely unique’ in our openness to international banks operating as branches. We also play host to many major subsidiaries of global banks, and a major international insurance market. This is not something that just happens without a lot of work to support it – most importantly in implementing international standards, but also in day-to-day supervision which enables us to manage the considerable risks involved by working closely with our counterparts in other jurisdictions. To facilitate this openness, we have recently updated our approach to international bank supervision and have put in place co-operation arrangements with nearly 50 jurisdictions.[4]

    Independent

    Which takes me to the next point – independence.

    Independent regulation is at the core of what we do in the PRA.

    There’s an extremely well-documented link between the independence of regulators and financial stability[5], but independent regulation also enhances our competitiveness in other ways. In part this is by ensuring that regulation is consistent and predictable: by removing regulation from day-to-day politics, Parliament can ensure that regulators follow more timeless objectives. This in turn provides certainty to businesses that the regulatory framework will be relatively stable over time.[6]

    Our independence is the basis for our international credibility. Independence is widely accepted as international best practice, and indeed is enshrined in the global standards which the UK has signed up to.[7] I believe our record of independence is a big part of why authorities in other countries are content for their firms to operate here at such scale.

    Of course, independent regulators must be transparent and accountable so we strongly support the measures in the FSM Bill to enhance our accountability to reflect our new powers. “Independence” is also a carefully circumscribed term in this context – it really means operational independence, to deliver objectives which are set for us by Parliament.

    Given this, I think we should be very cautious of any measure that would undermine – or be perceived to undermine – the independence of regulators from government. In particular, ministers have indicated that the government may amend the FSM Bill to introduce an ‘intervention power’. We do not know exactly what this power will look like, but a power which allowed ministers to override regulatory decisions just because they took a different view of the issues involved would represent a significant shift away from a model of independent regulation. Leaving aside the evidence on financial stability, some might think that such a power would boost competitiveness. My view is that through time it would do precisely the opposite, by undermining our international credibility and creating a system in which financial regulation blew much more with the political wind – weaker regulation under some governments, harsher regulation under others. These are not features which would make the UK a more attractive place for international firms to do business in.

    I appreciate of course that I am ill-placed to advance this argument, for the simple reason that it looks self-interested coming from the regulator. But all of my experience in this field tells me, as a citizen of the UK, that this point is true.

    Proportionate

    On which note, you might comment that of course, as a prudential regulator, I would say that competitiveness is all about high standards. But I appreciate that there is a limit to this logic and that we should recognise the need to minimise unnecessary regulatory burdens. Regulations that are excessively tight, or which are unnecessarily costly or complex to comply with, are negative for growth and competitiveness. Effective regulation needs to be proportionate, and only create burdens when necessary to achieve its objectives.

    Unnecessary or badly designed regulations can damage the financial sector’s productivity, imposing a dead-weight cost as firms spend resources on compliance rather than providing services. This raises the cost of finance to the real economy, harming economic growth. And they make the UK less attractive as a place to do business, while adding to the cost base of UK firms.

    So while we have no appetite to remove regulations that maintain financial stability and whose absence would lower important standards, we also recognise that unnecessary burdens should be removed. To quote the Chancellor who established the PRA, we have no desire to establish the ‘stability of the graveyard’.

    Innovative

    Regulatory reform is about more than just stripping away regulations. It is also about innovating within the regulatory framework, to keep pace with technological, economic and societal changes.

    This includes creating regulatory regimes for new forms of finance. Fintech, stablecoins and the like will only make a positive contribution to the economy if they can operate in a stable, high-confidence environment.[8]

    It also includes helping industry adapt to changing risks. Our work on operational and cyber resilience is an example: we create a coordination mechanism that allows firms to converge towards best practice. Feedback from industry has been strongly positive on this point.

    And it includes reducing barriers to entry and growth, so that innovators can enter the market and competition can drive productivity.

    Regulatory reform[9]

    Our exit from the EU undoubtedly offers significant opportunities to revisit regulations that just don’t make sense for the UK, particularly in the context of proportionality and innovation. This is a major priority for the PRA and we are already working intensively on early priority areas. I don’t want to prejudge that substantial package of work, and we will of course take an open, consultative and evidence-based approach to bringing forward policy proposals – including through regular dialogue with industry, Parliament and other stakeholders. But the programme includes:

    • Solvency II reform. I won’t dwell too long on this one, as I have spoken on it (at much greater length than most humans can tolerate) elsewhere.[10] But by reforming the insurance rules we have inherited from the EU, we hope to: enable insurers to invest in a wider range of assets, supporting economic growth; strip unnecessary bureaucracy away from the regime; and ensure the regime is credible, by fixing weaknesses in its design and calibration which could pose risks to insurance policyholders if left unaddressed. We issued a discussion paper on Solvency II in April, setting out our assessment of the reform package. We received very substantial feedback from industry and other stakeholders on our DP, and we hope to be able to publish a revised assessment very shortly.
    • We are also using our post-Brexit freedoms to develop a simpler prudential regime for smaller banks.[11] This ‘Strong and Simple’ project will deliver a more proportionate and less complex regime for smaller firms, while ensuring standards remain strong. We will also be considering the future regime for mid-tier banks.
    • We are implementing the final set of post-financial crisis Basel standards for banks – known as ‘Basel 3.1’. In doing so we will maintain the UK’s reputation for adherence to global standards, supporting our international competitiveness, and we will also have careful regard to other jurisdictions’ implementation of the standards. We will be bringing forward a comprehensive Basel 3.1 consultation by the end of this year.
    • We are also looking at reforms to remuneration standards in banking. Ever since it was first introduced, the PRA has set out its concerns around the prudential effectiveness of the EU’s bonus cap – and these concerns have been widely reported. We also intend to look more broadly at the whole structure of rules around remuneration. We will consider how these rules, which are a patchwork of EU and UK regulations, can be streamlined and made more effective and proportionate. In doing so, we will be clear that rules around remuneration are an important tool to ensure decision-makers and risk-takers have the right incentives. My own view, based on personal experience as a Treasury official through the global financial crisis, is that the 100% cash-out at year-end approach to bonuses which was common in banking up until 2008 was an important part of what drove the financial system over the cliff, and we should have no appetite to return to that heads-I-win tails-you-lose approach. But in the context of our competitiveness as an international financial centre I think it’s also sensible for us to take another look at the set of rules in this area, with more of a global view now that we are out of the EU.
    • Reporting rules are also ripe for simplification. Currently, under the inherited EU framework, we collect some data we don’t need because our reporting standards were a compromise across 28 member states with different needs. This puts an unnecessary burden on firms, and it’s a burden we want to remove. We have already removed some reporting requirements from insurance firms, particularly smaller firms, and will be consulting in the coming months on easing insurance reporting burdens further; we will then begin a review on the banking side.
    • We will be reviewing our enforcement policies to make them clearer and create options for quicker outcomes.
    • We are making our rules more accessible and user-friendly. This is a significant task but we have already started by publishing a Policy Index of our prudential and resolution policies, which received over 10,000 views in its first month.[12] And we plan to bring our policies together on one user-friendly website, streamline our materials, and adopt a more coherent approach to the structure and language we use in future.
    • Following our discussion paper last year, the Bank of England and PRA are moving forward to create a regulatory framework for systemic stablecoins. This will allow both non-banks and PRA-regulated banks to innovate in this space. The Bank will consult on this new regulatory regime in the New Year.

    Growth and competitiveness

    All of this is already under way while Parliament considers whether to add a secondary growth and competitiveness objective to our mandate. We need to be careful not to get ahead of those decisions by Parliament, but at the same time in view of that debate we are leaning more heavily on existing parts of our mandate (in the form of our “have regards” and remit letter) which cut in the same direction.

    Our authority derives from Parliament and we are accountable to Parliament for our exercise of it. Accordingly, if and when Parliament agrees to give us a new secondary objective we will take it forward with vigour, including in the areas listed above. This will require an evolution in our mindset, and this is appropriate given the change in our role – it is not unreasonable to require that, if we are to take on some functions which were conducted with political input when we were a member of the EU, then we should take more explicitly into our consideration some of the objectives which motivated that input. To this end we have already published a paper explaining how we would propose to approach policymaking in the future, including our new objective if Parliament sets it for us.[13]

    But as we make this shift we must do it carefully and without undercutting the primacy of safety and soundness in governing our actions.

    The UK’s reputation for robust, independent and open regulation is a hard-won asset, and it is a vital part of what makes the City an unparalleled global success story. The PRA and the Bank of England are committed to preserving this reputation, while also designing a proportionate and innovative regulatory regime which allows the UK economy to thrive. I look forward to working with you all to achieve these goals.

    My thanks to Hugh Burns and colleagues across the PRA for their help in preparing this speech.

    1. Of course, nobody advocates a return to pre-crisis bank capital ratios. But the recent turmoil in LDI funds reminds us not to be complacent about financial instability.
    2. Adhering to global standards does not mean being a rule-taker. The UK is highly influential in global standard setting forums, and the credibility of our own regulatory framework is important to maintaining that influence.
    3. United Kingdom: Financial Sector Assessment Program-Some Forward Looking Cross-Sectoral Issues. The IMF also specifically assesses compliance with Basel core principles. More broadly, the credibility of our regulatory regime will be of interest to a wide range of international observers, including ratings agencies.
    4. SS5/21 – International banks: The PRA’s approach to branch and subsidiary supervision | Bank of England.
    5. This evidence is summarised in Box 1 of our recent discussion paper: DP 4/22 – The Prudential Regulation Authority’s approach to policy.
    6. Of course, we also retain the flexibility to adapt the regime, quickly if needed – this is another benefit of putting the content of regulation in regulators’ rules rather than primary legislation. But the outcomes we are seeking to achieve will remain consistent over time.
    7. The independence of supervisors from governments is one of the pillars of the Basel Committee’s core principles for effective banking supervision, and compliance with this principle is regularly assessed by the IMF and the World Bank.
    8. My colleague Jon Cunliffe made this point in a recent speech: Innovation in post trade services – opportunities, risks and the role for the public sector − speech by Sir Jon Cunliffe | Bank of England.
    9. I focus here on reforms to regulation. We are also undertaking a programme of internal changes at the PRA, in part to support the regulatory reform agenda. These internal changes were summarised in my speech at Mansion House last year: Prudentist – speech by Sam Woods | Bank of England.
    10. Solvency II: Striking the balance − speech by Sam Woods | Bank of England.
    11. Discussion Paper 1/21 – A strong and simple prudential framework for non-systemic banks and building societies.
    12. Prudential and Resolution Policy Index | Bank of England.
    13. DP4/22 – The Prudential Regulation Authority’s future approach to policy | Bank of England.
  • PRESS RELEASE : National Trust Comment on the Retained EU Law Bill [October 2022]

    PRESS RELEASE : National Trust Comment on the Retained EU Law Bill [October 2022]

    The press release issued by the National Trust on 21 October 2022.

    The Retained EU Law Bill is to have its second reading in parliament today, Tuesday 25 October 2022. Here, our Director of Outdoors & Natural Resources, Patrick Begg, explains why this bill puts important environmental protections at risk and why an alternative process should be put in place:

    “Over 570 environmental, animal welfare and other important safeguards are at risk of being erased over the next 18 months, with little indication of what may replace them. This is deeply concerning. Nature is finite, once it’s gone we can’t get it back. And it’s already close to breaking point: global wildlife populations have declined by an average of 70% since 1970.

    “Government’s role should be to nurture our natural world, our rivers, seas, woodland and wildlife which underpin the economy as much as they do society’s wellbeing. Halting, and then reversing, serious declines in nature is fundamental to all our lives, and that starts with maintaining basic protections.

    “We urge the Government to withdraw the REUL Bill and instead put in place a more appropriate process, giving any new environment laws the time and resources needed for proper scrutiny through parliament.”

  • PRESS RELEASE : Statement by Executive Vice-President Vestager on amendment to State aid Temporary Crisis Framework in context of Russia’s war against Ukraine [October 2022]

    PRESS RELEASE : Statement by Executive Vice-President Vestager on amendment to State aid Temporary Crisis Framework in context of Russia’s war against Ukraine [October 2022]

    The press release issued by the European Commission on 28 October 2022.

    Today, the European Commission has decided to prolong and amend the State aid Temporary Crisis Framework in order to address the evolving needs of Member States to support the economy in the context of the continued invasion of Ukraine by Russia.

    Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Russia’s continued unjustified war against Ukraine and its weaponisation of energy resources has serious effects on Europe’s economy. All European households and companies face extraordinary increases of energy costs. In this context, the Temporary Crisis Framework provides a horizontal tool enabling Member States to support those that need it, using the full flexibility of State aid rules, while preserving a level playing field in the Single Market.

    The Temporary Crisis Framework has been designed with a number of objectives in mind. First, we need to enable Member States to support companies that are seriously affected by the current energy prices today. This support must be geared for addressing the current needs and allow a transition to a situation of more stable energy prices in the future – even if likely at higher levels than in the past. Second, we need to ensure that there are clear incentives to reduce energy consumption, as without more energy efficiency, we will increase scarcity, driving prices even higher. Third, we need to continue working on the root causes of the current energy crisis and invest into a future where we are less dependent on fossil fuels. And fourth, we need to protect the level playing field. We must overcome this crisis together and prevent support to companies that don’t need it or that otherwise risks fragmenting the Single Market.

    The amendment of the Temporary Crisis Framework adopted today by the Commission is in line with this logic: it gives Member States more flexibility to set up support schemes tailored to the needs of their economy, continuing to incentivise the green transition, while maintaining safeguards to ensure that aid remains targeted and proportionate. At the same time, it also maintains market incentives for those same companies to further reduce energy consumption, since they will have to shoulder also parts of the higher prices. Furthermore, the amendment expands the tools for Member States to accelerate the roll-out of renewables and industrial decarbonisation efforts. Overall, we have prolonged the application of the Framework until end of 2023 in view of the continued crisis, giving Member States more predictability and time to implement support schemes and providing a stable legal framework for companies.

    Today’s changes have been discussed intensely with Member States in three rounds of consultations, involving a survey on Member States’ needs and two subsequent consultations on specific drafting proposals. We will continue to work closely with Member States and coordinate our action to make sure our Framework serves all European consumers and continues to support the Commission’s policy initiatives in the field of energy.”

  • Ursula von der Leyen – 2022 Statement on her Official Visit to Serbia

    Ursula von der Leyen – 2022 Statement on her Official Visit to Serbia

    The statement made by Ursula von der Leyen, the President of the European Commission, on 28 October 2022.

    Mr President, dear Aleksandar,

    It is wonderful to be back here in Serbia. I am very glad to be at this very special place, which I think shows the profound bonds we do have and our great cooperation. Today, we are watching the progress of the interconnector between Serbia and Bulgaria. It is great to see that this important project is taking shape. Indeed, you have just mentioned the funding that is coming from the European Commission and the European Investment Bank. It is round about 80%. And what we want to see is not only gas flowing from Bulgaria to Serbia, but this project will be one step further to bring us closer to each other. It will open Serbia’s gas market for diversification. It will improve Serbia’s energy security. And it will be important to see that we are very much looking forward to having this project now completed in hopefully one year. So we will press on both sides – I know that it takes two to tango, in this project, too – so that we are on time, because it is needed. We need to diversify our gas supplies. We see that dependency that is too much focused on Russian gas is not good. We have felt it bitterly during the last months. So the diversification away to reliable suppliers is paramount for us.

    I am very glad that we are also here today with an energy project, because we are already together in an Energy Union. By that I mean that, whatever the European Union does, the Western Balkans are included because we are so much interconnected that, in our Energy Union, whatever the one or the other does has an influence on us. If something happens in the European Union, it has an influence in the Western Balkans. If here something, for example an improvement with the gas interconnector, happens, it has a positive influence for the whole European Union because we are in an Energy Union.

    And we have been working very hard during the last months in this Energy Union to master the energy crisis. Just a reminder for you: Russia has cut 100 billion cubic metres of gas and we have been able to compensate. We have been able to compensate by diversifying away to other reliable suppliers. Now, we invite everyone, and Serbia too, to join us in our EU joint procurement of gas because we want to use our market power as the Energy Union to achieve better results on the global market where there is a lot of competition for gas, mainly LNG, and to be there as a European Energy Union exerting our market power for better results on the prices.

    You are here in Serbia as affected as the rest of the European Union by the difficulties we have in the energy market overall. So there is another step that we are taking forward. We have decided that we want to take two steps: One is a short-term support, not only for the Member States, but also for the Western Balkans. And here, I am happy to announce that EUR 165 million in grants for immediate budget support are available for Serbia. And I think this is absolutely necessary so that Serbia, like other countries, is able to support vulnerable families, vulnerable households and vulnerable businesses, small and medium enterprises, so that they can cope with the high energy prices. But this is not a long-term solution. It is not a sustainable solution. What we need is investment.

    And therefore, Mr President, dear Aleksandar, the second part, I think, is at least as important. These are EUR 500 million in grants in investment in infrastructure. Infrastructure like we see it here. Infrastructure that is badly needed. For example, if I may quote a few topics that are on our list, the Trans-Balkan Electricity Corridor – that is fascinating. It is going to be electricity from Italy to Bulgaria via Serbia, Montenegro, Bosnia and Herzegovina. All of it will be interconnected so that we can help each other, that we can serve each other and that we are never going to be again in such a bottleneck situation as we are today.

    Another project that is very dear to my heart is that we want to support Serbia together in building a new, a modern and more energy-efficient University Children’s Hospital in Belgrade. This is a project on which I am very glad that we can advance together. Let me give you one figure: 40% of the emissions we lose go through buildings that are badly insulated. So the other way round is also true: The better, the more energy efficient we build buildings, the better it is for the climate. But of course, the better it is also for our energy efficiency. This hospital should be completed by 2025.

    And then indeed what I just saw, and Mr President, you explained to me the third element that is so important, that is the gas interconnector between Serbia and North Macedonia. Here too, this will allow to complete the region. All this is in our projects and in this package.

    Finally, a last point: This energy crisis stems from the atrocious war that Russia is leading against Ukraine. And this war is redefining the security landscape of our entire continent. So it is for the European Union of utmost importance to invest even further in our Western Balkan partners – more than ever before because these investments are investments for the future. They are investments in peace. They are investment in the stability, in the prosperity of our shared continent. And let me assure you that the European Union is and will remain Serbia’s most important political and economic partner.

    Due to the good progress that was made in the past, Serbia is one of the most advanced countries on the European path. And as you know, we want you to take now the next further very important steps towards the European Union. We know the topics, we will discuss them later bilaterally – be it the independence and the accountability of the judiciary or the fight against corruption. I know that you are very engaged in that. And may I thank you, Mr President, for your latest announcement that the Serbian visa policy will be aligned with that of the European Union by the end of the year. This is an important announcement, many thanks for that. This is absolutely the right direction to head forward.

    Last but not least, we will have tonight a bilateral meeting. I think there are other topics on the agenda. If I may express a deep wish, that is the wish that we will have progress in the Dialogue between Kosovo and Serbia. Here too, I know it is always necessary to have two sides. But we all know by experience that only with dialogue are we able to solve conflicts and to move forward in an acceptable way for all of us. So my comment in the very end is: I know that Serbia’s future is in the European Union. I know that our European Union is not complete without Serbia. We share the same commitment to our common European future. Therefore, let us continue the hard work for this common future.

    Thank you very much for having invited me here today.

  • Ursula von der Leyen – 2022 Speech in Bosnia and Herzegovina

    Ursula von der Leyen – 2022 Speech in Bosnia and Herzegovina

    The speech made by Ursula von der Leyen, the President of the European Commission, on 28 October 2022.

    Dear Members of the Presidency-elect,

    Honourable Members of the joint collegium,

    Incoming Members of Parliament,

    Dear representatives of businesses and civil society,

    EU Ambassadors,

    And of course, Ladies and Gentlemen,

    It is such a pleasure for me to be here with you in Sarajevo at this historic moment for Bosnia and Herzegovina. But before I speak about this beautiful city and this wonderful country, allow me to take you for one small moment to the city where I was born and where I live today. And that is the city of Brussels. In the heart of Brussels, there is a piece of Bosnia and Herzegovina. It is a huge, colourful mural, painted by a young artist from Sarajevo – whose name is Rikardo Druškić. It brings light and it brings joy from the Balkans into the sometimes very grey weather of Brussels. But beyond the beauty of it, the mural sends a very clear message: It says that Bosnia and Herzegovina has a place in the heart of the European Union. You are part of Europe. So you belong in our Union. And it was so moving to see the European flag shine on three landmark monuments in Sarajevo, in Banja Luka and in Mostar – to celebrate our proposal to make Bosnia and Herzegovina a candidate country to join the European Union. This is your success. And you can be so proud of it. Because our flag, that was visible this night, will be your flag, too. It belongs in this country. And this is why I came here today. This is what I want to say to all the citizens of Bosnia and Herzegovina. You are the future of the European Union. Your future is the Europe Union.

    And this is not only because you achieved candidate status. It is also because the citizens of Bosnia and Herzegovina deeply believe in Europe. Over three quarters of your citizens support EU membership. There is a solid majority in favour of it in all parts of the country. And this faith in Europe is even stronger among young people. For young people in this country, among others, Europe means economic prosperity. It means, for example, freedom of movement. But it is not just that. The path towards our Union is also the path towards a better Bosnia and Herzegovina. It is about turning this country into the country of the young people’s dreams. There is an entire generation of citizens of Bosnia and Herzegovina who are born after the war. They respect the past. But they do not want their country only to be defined and divided by its tragic past. They want a country that is united. They want a country that has a common sense of purpose. Born from the experience of the past, but open and ready for the future. And membership to the European Union is part of this common purpose. And you, the new leadership of Bosnia and Herzegovina, of this country, you are the people who can make their dream come true. You are the ones who have the key for the dream of these young people in your hands. With your political work, and it is a huge responsibility, the country has a once-in-a-generation opportunity to move forward. This is Bosnia and Herzegovina’s moment, and I would like to encourage everyone here, everyone of you present here and working for this country, to seize this moment.

    This is also the meaning of our recommendation to grant candidate status to Bosnia and Herzegovina. Once again, from the bottom of my heart: My utmost congratulations to what you have achieved. It is your success. Without your work, it would not have been possible. The last four years, I know, have not always been easy. Because of COVID-19 for example, because of the war in Ukraine, because of deep political divisions. And yet, even in difficult circumstances, progress has been made – on public procurement for example, on achieving membership of the Union Civil Protection Mechanism for example. Or another success earlier this week on Europol cooperation – that you achieved. And these examples should teach a very simple lesson. The lesson is: If there is a political will, there is a way to make it happen. That is the lesson to learn from the past. Now is the time for the country to come together again and advance on the path towards the European Union. I will not dwell on the eight reform steps that we have clearly outlined in our recommendation. We all know that passing these reforms will not be easy. But I would like to invite you to always set your sights on what lies at the end of this path. Because Bosnia and Herzegovina, with your work, will be a country, for example, where everyone is equal before the law. It will be a country where young people unfold their talent and their hard work will lead into success. They do love their country. They want opportunities here in Bosnia and Herzegovina. It will be a country that is attractive for investors. You have the key in your hands for that. It will be a country where everyone feels represented – young and old, people who identify as Bosniaks, as Serbs and Croats, as well as people who just feel citizens of this country. The reforms do not only matter because they lead into the European Union, the reforms matter because they will make your country a better place for all its people.

    Ladies and Gentlemen,

    The door of the European Union is open. Please seize the opportunity and use this invitation. It is up to you now to walk together through this open door. The more you do that, the more you help me to support your country, Bosnia and Herzegovina, for example to defend the candidate status in the European Council and to advocate for your country. And I know I can rely on you. This is your historic responsibility as the new leaders of Bosnia and Herzegovina. That is a lot of responsibility on your shoulders – I know it. But I am positive that you are able to carry it. And rest assured: We will always be at your side. This is my personal promise. Our proposal for candidate status is a very clear political statement. And we will support you and your reforms and your work, and accompany you along the way.

    A good part of the work is already ongoing. I remember that, one year ago, during my last visit, I crossed an EU-funded bridge that links Croatia and Bosnia and Herzegovina. Later today, I will inaugurate the Ivan Tunnel. It will of course improve the connection of Mostar to Sarajevo and, further north, to Budapest. But this Ivan Tunnel is much more than that, it is very symbolic because it shows that Bosnia and Herzegovina lies at the heart of Europe, and you should also lie at the heart of our trade and our economic achievements. I think this cooperation – that we are enabling, that we are opening not only physically with the Ivan Tunnel but also by making sure that the trade and the economic exchange between us is getting more seamless and more intense – is even more crucial at a time when this horrible Russian war in Ukraine is raging. We see that Russia is not only waging war against Ukraine, it is also waging war on the energy side. And the energy problems are hitting vulnerable families as much as they are hitting for example businesses and small and medium enterprises. For us in the European Union, it is important to stick together with you. Therefore, as that in the European Union, I would like to announce here in Bosnia and Herzegovina, that we are putting together an energy security package for the Western Balkans. It will bring EUR 70 million of support in grants for Bosnia and Herzegovina. This is important now, as immediate support, for example to support vulnerable families and vulnerable businesses, small and medium enterprises which have a hard time. And there is a second part in it that is at least as important: This is – for the medium term, for the Western Balkans – EUR 500 million in grants for infrastructure. Infrastructure for the future so that together we get more energy independent. Investments in interconnectors, for example. Investments in renewables because every kilowatt hour from renewable energy that is produced here is clean energy at home that brings good jobs for the region and makes us energy independent and gives us security of supply. I am speaking about solar, I am speaking about wind or biomass power plants. These are energy projects that can be built in less than one year. So here is the opportunity to seize it and to really take this investment and to make a big step forward.

    I know that many people in the country feel anxious because of the war that is raging. Not only has Russia launched an assault on basic international rules that have been providing peace and security for the region since 1995, but it is also having a direct impact on the economic situation of our European Union and thus on all people in the Western Balkans and the people in Bosnia and Herzegovina. As much as the challenge is out there, I think the best solution is in an even closer cooperation and to stand together. It is in your immediate interest to work closer together in our Single Market and to work towards the EU membership. Because we all know by experience that, whatever the challenge is – and we have gone through many challenges in the last year –, if we stand together, if we work together, we are strong and we are unbeatable. And we should use this strength in this very crucial moment.

    Ladies and Gentlemen,

    These are times of rapid change in the Western Balkans and in Europe. As you know, we have opened accession negotiations with Albania and North Macedonia. We have also granted candidate status to Ukraine and Moldova, and we have recognised Georgia’s European perspective. What I want to say is that there is new momentum, there is a wind of change that brings the European family closer together. And now is the time for Bosnia and Herzegovina to move ahead, too. Let us be honest, it seemed impossible, we could not think about it, that we would reach the candidate status, if we think one year back [it seemed impossible one year ago, we could not think about it, that we would reach the candidate status]. And yet today, I am here with you in Sarajevo, we can celebrate together that you have achieved the candidate status. Therefore, let me tell you again: If there is a will, then there is a way to achieve your dream. And if Bosnia and Herzegovina finds unity of purpose, there is nothing that can stop you.

    Let me give you a little example for that, which is a big one in its effect. This summer, the success story of one young girl from Mostar literally made waves throughout the world. It was and is 16-year old swimmer Lana Pudar who won, as you know, the European gold medal in the women’s 200-metre butterfly and broke all Bosnia and Herzegovina’s records. Her story is the story of her country. It was not easy for her to train and to reach this enormous success. For example, she could not train in the city that lacks an Olympic-size swimming pool. But Lana has made it against all odds. And now, because of her success, a new Olympic swimming pool will be built in Mostar. Lana has become a symbol, not only for her hometown, not only for her community, but she has become a symbol all across the country. Her victory has been celebrated by all people of Bosnia and Herzegovina, in all entities and across all boundaries. This is the dream of your young people. This is the dream of your country. This is the dream to be united. United in Bosnia and Herzegovina’s diversity, united with your neighbours in one European family. And believe me, as with Lana, this dream can be realised. This dream can be realised if you take the responsibility, if we stand together and if we make the best of the responsibility the people have given you. So I want you to know that I will always be at your side. I know that a lot of work is ahead of you. But this is the moment to seize it.

    Many thanks for your patience, for listening to me. And please join us in working together.

    Thank you very much.

  • Ursula von der Leyen – 2022 Speech at the Sustainable Investment Summit

    Ursula von der Leyen – 2022 Speech at the Sustainable Investment Summit

    The speech made by Ursula von der Leyen, the President of the European Commission, on 28 October 2022.

    Distinguished guests,
    Colleagues,
    Activists,
    Investors,
    and leaders across the field of sustainability.

    I am delighted to open this year’s Sustainable Investment Summit.

    Since we met last year, global economic growth forecasts may have weakened. But our collective commitment to building a sustainable economy has not.

    In fact, the business, security, and moral case for the green transition has only become stronger. The same fateful week when Russia invaded Ukraine in February, the leading authority on climate change, the IPCC, issued a stark warning to the global community. They demonstrated that the climate is changing faster than our capacity to adapt.

    The message could not be clearer: We must speed up sustainable investments, and increase their scope. Now more than ever, despite Russia’s attempt to disrupt the international order, the world must remain united in our fight for a peaceful, fair and prosperous future.

    I would like to focus on two points today, that you will cover in more depth in the panels.

    First, on public investment, which is needed to mobilise private capital.

    Second, on empowering workers with skills to drive the green transition.

    Let’s start with public investment. Our immediate priority is tackling the energy crisis, which risks becoming an economic and social crisis. Already at last year’s summit, I spoke about the unsustainability of the energy system, which is still dominated by fossil fuels. Since Russia’s brutal attack on Ukraine, this has become even more obvious. Putin is using fossil fuels as a weapon against Europe. But Europe will not be blackmailed. We will not compromise on our values.

    We are determined to end our dependence on Russian fossil fuels, once and for all, and fast. By diversifying supply, saving energy, and accelerating the roll-out of renewables. Two figures: Last year, 41% of Europe’s gas imports came from Russia. Now, this figure is down to 9% pipeline gas. We were able to compensate these losses through increased supply by our trusted partners – like the US and Norway. In parallel we have filled our gas storages to over 90%. This is significantly higher than it was last year. And we have managed to save 15% of the gas consumption. But we have to go and steer the medium and long-term transition. We have proposed REPowerEU, an investment support to cut our dependence on Russian fossil fuels by accelerating the deployment of renewables. Renewable energy is not only good for the climate, it is also good for our independence.

    It is clean energy produced at home. Gas pipelines are being built fit-for-purpose for green hydrogen. Interconnectors are being completed to create a Europe-wide electricity grid, to support the mass deployment of wind and solar. So, we are investing in the infrastructure and technology needed for a full transition to a low-carbon economy.

    REPowerEU will come as additional firepower and acceleration, on top of the recovery and resilience plans of EU Member States. To date, the Commission has given the green light to nearly 500 billion euros from NextGenerationEU, of which half support the green transition. This includes measures in sustainable mobility, energy efficiency, and investments in renewables and grids. For example, in France’s plan, 85.000 ecological bonuses have already been disbursed to support the uptake of clean vehicles. And this is just the start. Because much of our public investment is designed to help de-risk and mobilise private capital. Like in Italy’s plan, where NextGenerationEU funds are being used to boost their National Innovation Fund. This is to finance private investments that have a positive impact on research and innovation for a low-carbon economy.

    The measure in Italy aims to support 250 small and medium-sized enterprises with 700 million euros in sustainable investment. This is the right way to go, because we need entrepreneurs and private investment to help get the job done. That is why we are here today. The green innovation is here. The public investment is here. And the path is clear. This is a truly exciting moment for all of us who believe in sustainable progress.

    Which brings me to my second point: human capital. This is a core theme of today’s summit. And for very good reason. There are entrepreneurs with big projects and dreams, and companies with ambitious plans to decarbonise, who simply cannot find the professionals with the green or digital skills to work with them. In Europe right now, we have the strongest labour market in decades, but at the same time we have a shortage of the right skills. This is a trend that has picked up especially in the last two years, as we recovered from the pandemic lockdowns. The Munich-based IFO Institute has found a growing shortage of skilled workers in almost every EU Member State, across economic sectors – from manufacturing to services. For example in construction, which is a pivotal sector for the clean energy transition, nearly 35% of EU firms report impairments due to a shortage of skilled workers.

    That is why I have proposed to make 2023 the European Year of Skills, to focus our attention and sustainable investment on this crucial issue. At European level, we have set targets on re- and up-skilling and made available large amounts of EU funding: nearly 1.5 billion euros in NextGenerationEU so far, and 4.2 billion euros from the European Social Fund.

    But it is about more than funding. It is about bringing industry and training providers together, employer’s associations with trade unions. The goal is to better match skilling strategies with the economy’s needs in our labour market. This is an approach we are pioneering with the Pact for Skills. We have created 12 large-scale partnerships offering skilling opportunities to 6 million EU citizens of working age.

    For example, nearly 1500 graduates and workers have already received training in the offshore renewable energy sector. This is great news. Because offshore wind, for example in the Baltic and North Sea, is a huge and clean power source. Both for Europe’s energy independence from Russia. And to meet our climate ambitions. Because it is people and their know-how who drive positive change.

    Ladies and Gentlemen,

    If we take a step back, we have identified where investment is needed. In clean energy. In green tech and skills. And the list goes on, for we haven’t even spoken about biodiversity. The potential of green innovation and growth is immense. But to unlock this potential, we need to shift the entire financial system – away from unsustainable practices, towards investments that are truly future-proof.

    The EU has created the most advanced sustainable finance framework globally. The EU is working hard to walk the talk on sustainable investment. For example, we are on track to be the world’s largest issuer of green bonds, to finance Europe’s climate-related reforms and investments. So far, we have issued 28 billion euros in green bonds, continuously attracting significant oversubscription for our issuances. This is a boost not only to Europe’s transition, but to the green bond market itself, as investors will have access to a very liquid green curve over time.

    Sustainability is much more than the right thing to do. It is also the safest and smartest investment we can make. Betting on a low-carbon economy, that gives back to nature more than it takes, and reinforces our security, is the most certain economic trend in the coming years and decades.

    Thank you for your leadership.

    Thank you for your pledges.

    And I wish you an exciting Summit.

  • PRESS RELEASE : Zero emission vehicles – first ‘Fit for 55′ deal will end the sale of new CO2 emitting cars in Europe by 2035 [October 2022]

    PRESS RELEASE : Zero emission vehicles – first ‘Fit for 55′ deal will end the sale of new CO2 emitting cars in Europe by 2035 [October 2022]

    The press release issued by the European Commission on 28 October 2022.

    The European Commission welcomes the agreement reached last night by the European Parliament and Council ensuring all new cars and vans registered in Europe will be zero-emission by 2035. As an intermediary step towards zero emissions, the new CO2 standards will also require average emissions of new cars to come down by 55% by 2030, and new vans by 50% by 2030. This agreement marks the first step in the adoption of the ‘Fit for 55′ legislative proposals tabled by the Commission in July 2021, and demonstrates ahead of COP27 the EU’s domestic implementation of its international climate commitments.

    Executive Vice-President for the European Green Deal, Frans Timmermans, said: “The agreement sends a strong signal to industry and consumers: Europe is embracing the shift to zero-emission mobility. European carmakers are already proving they are ready to step up to the plate, with increasing and increasingly affordable electric cars coming to the market. The speed at which this change has happened over the past few years is remarkable. It is no wonder that this file is the first one in the entire Fit for 55 package where Member States and the European Parliament have come to a final deal.”

    This clear signal to manufacturers and citizens will accelerate the production and sale of low- and zero-emission vehicles and put road transport on a firm path to climate neutrality by 2050. This new legislation will make the EU’s transport system more sustainable, provide cleaner air for Europeans and marks an important step in delivering the European Green Deal. It clearly shows the commitment of the EU to reach its climate goals and shows that Russia’s war of aggression in Ukraine is not slowing our clean energy transition but rather accelerating our work and making us progress faster to become the world’s first climate neutral continent by 2050.

    Next steps

    Today’s provisional agreement now requires formal adoption by the Parliament and the Council. Once this process is completed, the new legislation will be published in the Official Journal of the Union and enter into force.

  • PRESS RELEASE : EU provides €1 million in funding to the Office of the Envoy on Technology of the UN’s Secretary-General [October 2022]

    PRESS RELEASE : EU provides €1 million in funding to the Office of the Envoy on Technology of the UN’s Secretary-General [October 2022]

    The press release issued by the European Commission on 28 October 2022.

    The EU will provide €1 million to support the work of the Envoy on Technology of the UN’s Secretary-General over the next two years. This contributes to the financing of the Office’s work as well as the Envoy’s outreach activities.

    This will be done under a cooperation agreement signed between the Commission ant the Office of the Envoy on Technology.

    This agreement reflects the commitment by the EU and its Member States to support the UN Envoy on Technology in implementing the digital aspects of the UN Secretary-General’s ‘Our Common Agenda’, notably the development of a Global Digital Compact and the promotion of the multi-stakeholder model of internet governance. EU Member States will also offer their support to the Office of the Envoy on Technology in a Team Europe spirit.

    Executive Vice-President Margrethe Vestager said: “The European Union is committed to contribute to an Open Internet, and to a global digital transition firmly grounded in human rights and freedoms. All this in line with Sustainable Development Goals. This is at the heart of our digital ambition, and of the cooperation agreement we signed with the UN. I am looking forward to working with the new UN Tech envoy on ensuring that many more people benefit from the digital transformation.”

    High Representative/Vice-President Josep Borrell said: “Every day, we see a battle of narratives and values. This battle is waged using and misusing all the advances of technologies and digital space. Digital issues are not just technical matters, they affect every single aspect of our lives. So it is crucial that we build a set of shared principles for an open, free and secure digital future for all: a Global Digital Compact. This is the task of the UN Tech Envoy, and the EU will be supporting very closely this work as part of our digital diplomacy.”

    The Office of the Envoy on Technology aims to play an advocacy role in the global debate on digital transitions, helping advance a digital transformation in line with Sustainable Development Goals, while putting the emphasis on the open internet and human rights as cornerstones of digitalisation.

    The EU and its Member States advocate for a global multi-stakeholder effort to close the digital divides across the world. The free, open, secure and un-fragmented internet, underpinned by a concern for Human Rights, should be at the very centre of the digital transition, upholding the right to privacy, free speech and data protection, addressing arbitrary and mass surveillance while actively combatting internet shutdowns, online censorship, hate speech online, disinformation and cybercrime.

  • Ursula von der Leyen – 2022 Speech on her Official Visit to Albania

    Ursula von der Leyen – 2022 Speech on her Official Visit to Albania

    The speech made by Ursula von der Leyen, the President of the European Commission, on 27 October 2022.

    Thank you very much, dear Prime Minister, dear Edi,

    It is very good to be back here in Tirana. So much has happened since my last visit. It is just a year ago, I think, since I came last time to Tirana. In July, you started the accession negotiations with the European Union. And I was very glad to be with you in this historic moment. It was a touching moment, a very special moment. But let me repeat what I said at that time: It is your success. It is the result of many years of hard work done by Albania and the Albanian people. Years of patience, too. I remember that vividly, of course. You maintained a very strong focus on the European path, on the process. And therefore, this is now paying off with the accession negotiations. You have shown time and again your commitment to the values of the European Union. You are fully aligned with the European Union’s response to Russia’s brutal war of aggression. I must say it is exemplary how Albania has been actively defending the rules-based international order in the UN Security Council. I really thank you for this clear commitment. This honours you. It shows time and again that we are a community of shared values.

    Albania is now firmly moving forward on its European Union’s path. The screening process that has started is on track. The latest enlargement report that has just recently been published shows all the progress that Albania is making. You are strengthening the rule of law, with important reforms of your judicial system, for which you actually managed to build a cross-party consensus, and I really thank you for that. Because we know by experience that this is a precondition, but it is not easy, it takes a lot of strength to do that. And it is the right way to go forward. You have adopted new measures to ensure equality and inclusion in your society. Your economy has come back strong after COVID. These are all very tangible and very visible achievements. And these are achievements in a very challenging time. I am talking of course about Russia’s war of aggression against Ukraine, the terrible cruelty and destruction that it is bringing to the Ukrainian people. Russia is breaking international law and disrespecting the UN Charter. And we also see and feel that Russia is using energy as a weapon, and by that it is manipulating the market. And of course, we all feel the knock-on effects of the rising energy prices and the unstable security of supply of energy. Fortunately, as you have said, Albania is completely independent from Russian gas, due to your hydropower system. But of course, the electricity that comes to Albania is influenced by the disturbances that we see in the energy market – the skyrocketing prices. And thus, it is also affecting your country; it is also affecting Albania. In the European Union, we have decided that the only possible response is unity and solidarity. As we are in this together, the response, together with Albania, is unity and solidarity.

    We are in an Energy Union already. We are putting forward now an energy support package for the Western Balkans. We are doing the same in the European Union. It includes, first of all, direct budget support to address the impact of high energy prices that it has on families and businesses as you have said. There will be EUR 80 million of grants. And if I understood it correctly, you have a system in place that is good to support families and small and medium enterprises in this difficult time. The second part is not looking at the immediate support that will be accessible from January on. But the second part looks into the mid and long term – the support for the energy system: Here, we are talking about EUR 500 million in grants to invest in energy infrastructure for the whole region. It is going to be channelled through the Economic and Investment Plan for the Western Balkans. And it is already at work here. Indeed, I saw the beginning of the railway that is being built. But for me, it is also very important that we invest in renewable energy. Because renewable energy is home-grown; it gives us independence; it creates good jobs here in the region; and it is good for the climate. Investment will go into the floating solar power plant in Vau i Dejës. The modernisation of the Fierza hydroelectric power plant. I was stunned to see that it produces one quarter of the overall electricity production, and also to see for example the energy renovation of the campus of the University of Tirana. These are only few examples. But they show the direction of travel.

    Dear Prime Minister, dear Edi, I think, once again, Albania can be proud of its achievements. Because indeed, from your words, but more from your deeds, you prove that your people have shown not only vision but also resilience. You are on track on your way to the European Union. And therefore, from my part also: Congratulations to the fact that on 6 December, we are going to meet again, here in Tirana, with the European Council and we will have the Western Balkans Summit here in Tirana. It is going to be a very important meeting. I am very much looking forward to that. And many thanks again for the hospitality today.