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European Commission Press Releases

Banking Union: Non-performing loans in the EU continue to decline

Vlad Poptamas

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Photo source: europarl.europa.eu
Reading Time: 3 minutes

 

Efforts to reduce risks in the EU banking sector are bearing fruit, according to new figures released by the European Commission today.

In its fourth progress report on the reduction of non-performing loans (NPLs), the Commission today confirms that NPL levels are continuing their downward trajectory towards pre-crisis levels. The ratio of NPLs in EU banks has come down by more than half since 2014, declining to 3.3% in the third quarter of 2018 and down by 1.2 percentage points year-on-year.

Building on the December 2018 Euro Summit conclusions, today’s report will inform discussions on the completion of the Banking Union at the next meeting of EU finance ministers on 14 June, not least on the steps that need to be taken towards a European Deposit Insurance Scheme (EDIS).

Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Unionsaid: “Working out the remaining stocks of non-performing loans is part of our ongoing efforts to make the banking sector even stronger. Our banks are now better capitalised and better prepared to withstand economic shocks. We’ve recently agreed on more robust framework to regulate and supervise banks. Given this progress in reducing risks, I call on EU Finance Ministers to move forward with other measures to complete the Banking Union.”

In a separate Communication on the Deepening of Europe’s Economic and Monetary Union released today, the Commission invites EU leaders to finalise the changes to the Treaty establishing the European Stability Mechanism and to make a renewed effort to advance towards the completion of the Banking Union. Together with the completion of the Banking Union, this is essential for the development of Economic and Monetary Union, and strengthening the international role of the euro.

Despite clear improvements, high ratios of NPLs do remain a challenge in some Member States and deserve continued attention. Today’s Communication calls on Member States and the European Parliament to accelerate work on the outstanding proposals to complement the EU’s action to tackle this issue. Important strides have already been made towards full implementation of the EU’s Action Plan to tackle the high stocks of NPLs. However, the Commission calls on co-legislators to quickly agree on its proposed measures around the benchmarking of national loan enforcement and insolvency frameworks, and to develop a sharper focus on insolvency in the European Semester process.

Background

Together, the Banking Union and the Capital Markets Union promote a more integrated and stable EU financial system. They increase the resilience of the Economic and Monetary Union against adverse shocks by substantially facilitating private risk sharing across borders, while at the same time reducing the need for public risk sharing.

One of the key areas for reducing risk in the European banking sector is the further decline in NPLs. The financial crisis and subsequent recessions led to a more widespread inability of borrowers to pay back their loans, as more people and companies faced continued payment difficulties and even bankruptcy. This was particularly so in Member States that faced long or deep recessions. Consequently, many banks saw a build-up of NPLs on their books. High NPL ratios remain an important challenge in some banks in particular and can considerably weigh on their performance.

The Commission has been working together with Member States concerned to address the high level of NPLs, including through the European Semester and the setting up of ad hoc and system-wide impaired assets measures, compatible with state aid rules. Member States’ supervisors and banks have themselves also made considerable progress in cleaning up bank balance sheets since the crisis.

In March 2018, the Commission put forward a comprehensive package of measures as part of the EU Action Plan to tackle non-performing loans. The package contains policy actions in four areas: (i) bank supervision and regulation, (ii) further reforms of national restructuring, insolvency and debt recovery frameworks, (iii) developing secondary markets for distressed assets, and (iv) fostering, as appropriate and necessary, restructuring of banks.

Furthermore, the Commission has been working with Member States to enable case-specific solutions for banks within the framework of EU State aid and banking rules, with a clear objective of limiting costs to taxpayers whilst making sure depositors remained fully protected at all times. This enabled transactions that removed some €133 billion of gross NPLs from the balance sheets of banks over the last three years (around €103 billion in Italy; around €24 billion in Portugal; around €6 billion in Cyprus).

Today’s fourth progress report responds to the Council’s expectation to complete a regular stocktake of NPLs in the EU.

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European Commission Press Releases

Commission provides 20 cities with funding for innovative security, digital, environmental and inclusion projects

Vlad Poptamas

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Reading Time: 2 minutes

The European Regional Development Fund (ERDF) will finance 20 urban projects with €82 million. These projects were put forward by cities under the 4th call for proposals of the Urban Innovative Actions which is implemented by French region Hauts-de-France.

In particular, Piraeus (Greece), Tampere (Finland) and Turin (Italy) will receive grants for projects that will protect and reduce the vulnerability of public spaces, in line with the 2017 Action Plan under the Security Union. The EU funding will also support innovative solutions in digital transition, in responsible urban land use and in the fight against poverty in 17 other cities.

Commissioner for Neighbourhood Policy & Enlargement Negotiations, also in charge of Regional Policy, Johannes Hahn said: “No one is better placed than cities themselves to design the solutions that will transform life in urban areas. This is why the Commission has been directly awarding EU funding to cities so they can test ideas that will make them great places to live in, work and innovate.”

Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos added: “Our public spaces have been targeted by terrorists that see them as soft and easy targets. EU funding and knowledge sharing can ensure security by design, while they remain the centres for public life in our cities. The grants we award today are a concrete step forward in that direction.”

Commissioner for the Security Union Julian King added: “With this call for projects under the Urban Innovative Actions, we continue to help cities and local authorities protect public spaces without changing their open character. This support is part of our work towards an effective and genuine Security Union, bringing together actors at all levels to strengthen our resilience.”

The description of the winning projects can be found here. They include, under the four categories:

  • Urban Security: Piraeus (Greece), Tampere (Finland), Turin (Italy)

Example: Piraeus will establish a Local Council for Crime Prevention and set up a single-entry point for victims of crime.

  • Digital transition: Gavà (Spain), Heerlen (Netherlands), Lisbon (Portugal), Ravenna (Italy), Rennes (France), Växjö (Sweden), Vienna (Austria)

Example: in Lisbon, the company VoxPop will facilitate user feedback to improve the city’s mobility system.

  • Sustainable use of land, nature-based solutions: Baia Mare (Romania), Breda (Netherlands), Latina (Italy), Prato (Italy), Plymouth (United Kingdom)

Example: the GreenQuays project’s ambition is to renature 7.500 m2 of urban area in Breda and to share their innovative ecosystem regeneration technology with other cities in Europe.

  • Urban poverty: Bergamo (Italy), Getafe (Spain), Milan (Italy), Seraing (Belgium), Landshut (Germany)

Example: in Landshut, the “Home and Care” project will provide special health and childcare to single-parent families.

The 5th and last call for proposals under the Urban Innovative Actions will be launched in September 2019. It will be the last opportunity for cities under the current EU budget 2014-2020 to seek financing for innovative actions in the areas of culture and cultural heritage, circular economy, air quality and demographic change. The winning cities will be announced in the second quarter of 2020.

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European Commission Press Releases

Facility for Refugees in Turkey: €127 million to boost EU’s largest ever humanitarian programme

Vlad Poptamas

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Photo source: avrupa.info.tr
Reading Time: 2 minutes

 

To ensure refugees continue to be supported by the EU’s largest humanitarian programme in Turkey, the Commission has today announced an additional €127 million to the Emergency Social Safety Net (ESSN) programme via the EU Facility for Refugees in Turkey. This new funding brings the total EU contribution to the programme to €1.125 billion.

Christos Stylianides, Commissioner for Humanitarian Aid and Crisis Management, said: “The EU is upholding its commitments to Turkey and the most vulnerable refugees. Our new funding will allow us to reach more than 1.6 million refugees, helping them to live in dignity in Turkey. Our financial assistance programme is a success story of innovation in humanitarian aid and has given many families a chance to build a secure future after having fled the war in Syria.”

The ESSN programme provides refugees with monthly financial assistance through a special debit card which can only be used within Turkey and whose use is strictly monitored. It helps refugees integrate into the local economy and society as they pay for basic needs themselves such as food and rent.

Background

The EU Facility for Refugees in Turkey was set up in 2015 in response to the European Council’s call for significant additional funding to support Syrian refugees in Turkey. It has a total budget of €6 billion divided into two equal tranches of €3 billion each.

Out of the funds of €6 billion, over €5.6 billion has been allocated, over €3.5 billion contracted and over €2.4 billion has already been disbursed, with over 80 projects already rolled out. EU humanitarian aid in Turkey focuses on supporting the most vulnerable refugees through projects in health, education, protection and meeting basic needs.

The ESSN programme is implemented by EU humanitarian partners, in close collaboration with the Turkish authorities. With financing from the EU over 1.6 million refugees receive around €20 per person per month, plus quarterly top-ups to help meet their basic needs such as rent and food. Registered refugees who use the debit cards are known and monitored on a regular basis.

In addition to humanitarian assistance, development projects under the EU Facility for Refugees in Turkey focuses on education, migration management, health, municipal infrastructure, and socio-economic support.

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European Commission Press Releases

Spring 2019 Standard Eurobarometer: Europeans upbeat about the state of the European Union – best results in 5 years

Vlad Poptamas

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Photo source: business-review.eu
Reading Time: 4 minutes

 

A new Eurobarometer survey released today shows a strong increase in citizens’ positive perception of the European Union across the board – from the economy to the state of democracy. These are the best results since the June 2014 Eurobarometer survey conducted before the Juncker Commission took office.

This latest Standard Eurobarometer survey was conducted after the European elections, between 7 June and 1 July 2019 in all 28 EU countries and five candidate countries. Amongst the main findings are a record-high support for the euro and climate change turning into the second top concern at EU level, after immigration.

 

1. Trust and optimism about the future at their highest since 2014

Trust in the EU is at its highest level since 2014 and remains higher than trust in national governments or parliaments. Trust in the EU has increased in 20 Member States, with the highest scores in Lithuania (72%), Denmark (68%) and Estonia (60%). In addition, over half of the respondents “tend to trust” the EU in Luxembourg (59%), Finland (58%), Portugal (57%), Malta and Sweden (both 56%), Bulgaria and Hungary (both 55%), Ireland, Poland, the Netherlands and Cyprus (all 54%), Romania and Austria (both 52%) and Latvia and Belgium (both 51%).

Since the last Standard Eurobarometer survey in autumn 2018, the proportion of respondents who have a positive image of the EU (45%) has increased in 23 EU Member States, most strikingly in Cyprus (47%, +11), Hungary (52%, +9) Greece (33%, +8), Romania (60%, +8) and Portugal (60%, +7). A two-percentage point increase has been registered since autumn 2018 (+10 since spring 2014), reaching its highest level ever for the past 10 years. 37% (+1, compared to autumn 2018) of respondents have a neutral image of the EU, while less than a fifth have a negative image (17%, -3) –is the lowest score in 10 years.

A majority of Europeans are optimistic about the future of the EU (61%, +3 percentage points), while only 34% (-3) are pessimistic. Optimism is highest in Ireland (85%), Denmark (79%), Lithuania (76%) and Poland (74%). At the other end of the scale, optimism is less pronounced in the United Kingdom (47% vs 46%) and in France (50% vs 45%).

55% of Europeans say they are satisfied with the way democracy works in the EU, the highest score since autumn 2004 (+5 percentage points since autumn 2018; +11 since spring 2014) while the number of those “not satisfied” has decreased by five percentage points, to 36%.

A majority of Europeans agree that “their voice counts in the EU”. The EU-28 average reaches 56% (+7 percentage points since autumn 2018; +11 since spring 2018; +14 since spring 2014), with the highest scores being observed in Sweden (86%), Denmark (81%) and Netherlands (76%).

 

2. Record high support for the euro 

Support for the Economic and Monetary Union and for the euro reaches a new record high,with more than three-quarters of respondents (76%, +1 percentage point; +9 since spring 2014) in the Euro area in favour of the EU’s single currency.In the EU as a whole, support for the euro is stable at 62%.

Positive opinions on the situation of the national economies prevail (with 49% judging the situation as being good and 47% judging it as being bad). The majority of respondents in 17 Member States (16 in autumn 2018) state that the national economic situation is good. Luxembourg (94%), Denmark (91%) and the Netherlands (90%) are the countries with the highest scores. The lowest percentage of positive opinions is observed in Greece (7%), Croatia and Bulgaria (both 20%), Italy (22%), Spain (26%) and France (29%).

 

3.EU citizenship and free movement seen as main EU achievements

In all 28 Member States, more than half of respondents feel that they are citizens of the EU. Across the EU as a whole, 73% feel this way (+2 percentage points since autumn 2018), and at a national level the scores range from 93% in Luxembourg, 88% in Germany, 87% in Spain to 57% in both Greece and Italy and 52% in Bulgaria.

A large majority of EU citizens support “the free movement of EU citizens who can live, work, study and do business anywhere in the EU” (81%, -2 percentage points since autumn 2018), and in every EU Member State more than two-thirds of respondents share this view, from Lithuania (94%) to Italy and the UK (both 68%).

 

4. Top concerns at EU and national level: climate change and environment on the rise

Immigration remains the main concern at EU level, with 34% of mentions, despite a strong decrease (-6 percentage points since autumn 2018). Climate change, which was ranked fifth in autumn 2018, is now the second most important concern after a strong increase (+6 since autumn 2018). Three concerns obtain identical scores: the economic situation (18%, unchanged), the state of Member States’ public finances (18%, -1) and terrorism (18%, -2), followed by the environment – main concern for 13% of the respondents, registering a four-percentage point increase.

Unemployment, which is nowin seventh position at EU level (12%), remains the main concern at national level (21%, -2 percentage points), together with rising prices/inflation/cost of living (21%, unchanged) and health and social security (21%, +1). The environment, climate and energy issues follow very closely after a strong increase (20%, +6). Immigration, with 17% of mentions (-4 percentage points since autumn 2018, and -19 since autumn 2015), falls out of the top three concerns at national level for the first time since spring 2014. The economic situation is in sixth place (16%, +1).

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