The EU’s perspective of financial regulation

Athanasios Moysiadis

The EU’s perspective of financial regulation


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Amid a period of economic instability and financial crisis, every initiative launched by the European Commission has to be carefully examined and assessed by the EU’s legislators to avoid potential complexities and unintended discontent. New Europe’s Violetta Rusheva talked to Eva Kaili, a European Parliamentarian and Member of the Committee on Industry, Research and Energy to discuss the EU’s perspective of deeper financial and economic integration, as well as the achievements reached by the European Parliament in this field:

In March the European Commission unveiled the FinTech Action Plan, which is at present, under the European Parliament’s scrutiny. Could you tell us a bit more about this initiative and the steps the EP is taking when it concerns financial regulation?

The FinTech Action Plan is a part of the legislation that the European Commission tabled before the European Parliament in order to harmonise the business environment in Europe and enable the financial sector to make use of rapid advances in new technologies like Blockchain, artificial intelligence and cloud services. Until now, the Member States have a few common things to share when it concerns the harmonisation of the financial or banking sector. The aim of the FinTech Plan is to remove these barriers and use the opportunities presented by technology-enabled innovation in the financial services. In 2008, when the financial crisis hit the EU, we realised that we have to be better prepared if a new crisis emerges. However, the first challenge we faced were the differences between legislative systems across the Member States, as well as laws and taxes.

We decided to move step-by-step and harmonise the environment to create stronger bonds across the EU. The capital market union is a part of this policy, as it helps to give more space to businesses. We are also working on a banking union, though the process is not as fast as we expected.

With the FinTech Plan, we want to get one part of the bloc’s competency and try to remove the barriers. For instance, if you want to set up a company to be able to address the whole of the European Single Market, it will be a challenging task. The EP wants to remove online barriers and try to make sure that you can make transactions and have other services without many differences. For instance, the transactions that are hidden fees in the EU’s banking sector in 2017 reached €130 billion. It is a huge problem that we have to deal with.

 NE: There is a growing critique of the Common Digital Single Market as many experts criticise policymakers for imposing too many restrictive regulations that, in turn, negatively influence fast-developing technologies. What do you think about it?

The raison d’etre for the Digital Single Market was to incorporate the digital economy into European integration, and we achieved substantial results. For instance, the European Parliament adopted the regulation to ban unjustified geo-blocking in the internal market. The legislation will allow online customers to access and purchase products or services from a website based in another Member State. We have already worked on portability of content and on the audiovisual package, and we are now working on copyright reform to make sure that citizens have access to content across every Member State while the creators are fairly remunerated. This will allow customers to enjoy the same catalogue regardless of their location for instance. Though content licensing is the prerogative of a Member State, we want to create common European platforms that will distribute these licenses. We have to approach this issue very cautiously, however, and not do harm to small companies operating on the market.

NE: Do all of the Member States agree with the interference of the EU into their domestic affairs?

Of course, the position varies across the Member States and barriers are still in place. But on the EU level, we basically decided that if we want to live together we have to compromise on many things and have the best practices. We are not trying to sell legislation or force the Member States to comply with it, but instead to find the best practices and work together.

When it concerns the FinTech Plan, which has 23 files, we have 11 Member States who joined and we expect more. But if you don’t join, you won’t get the benefits of this alliance.

 NE: Considering the rapid developments in the digital area and the growing intrusion of technical devices into every EU citizens’ life, how do we find a balance between privacy and the right to information?

I would say that it is more about the legal side of the question. Initially, EU politicians set a number of principles and rules that were aimed at enabling people to control their own data. This was done intentionally as companies and businesses that may use your data should not consider silence as you giving your consent to allow them to use the data for their own purposes. I think that the Cambridge Analytica case clearly highlighted this. Nevertheless, people should not demand that their data be removed or abuse the right to privacy when this data is used for scientific purposes. If you block data from being used for scientific purposes, then you have fewer results. Everyone thinks that they have a right to privacy, but there are the rights of the EU when it benefits from that, as well. We have to find a balance between the position of citizens who ask for their data to be removed and the interests of European society as a whole.

 

 

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