Speeches

One understands that a State of the Union message should emphasise positive results. However, this is best done against the background of a realistic assessment of arising uncertainties and challenges. I doubt whether in her address, the Commission President successfully achieved this. The emerging management dilemmas in the euro area were glossed over. Proposed responses to tackle growing social inequalities are inadequate. The paralysis over a common migration policy got scant acknowledgement. On the Green Deal and digitalisation, one still needs to know more clearly how much progress is really being achieved. True, the EU had to overcome the disruption caused by the COVID-19 pandemic, and it did this quite well. Still, too many policy areas are operating in a suboptimal mode. The realisation is spreading among some that the Union is being expected to play a leading role over matters for which it was not equipped. In response, to cope, others are eyeing further levels of European integration. But, as in the proposals for a defence union, this is also problematic, possibly dangerous. The Commission President thinks otherwise. Before heading for new major projects of integration, EU policymakers should focus on strengthening the current modus operandi, while aiming to attain a more meaningful level of democratic legitimacy.

Mr President, I come from a region where infrastructures, businesses and private property are already subject to the financial risks and damages being caused by climate change. We need sustained public and private investments able to contain these risks and reverse the damages. They must do so profitably. Soon they will become the best financial offer available to investors against the background of climate change. Already, the market of retail and institutional investors that gives preference to green offerings is becoming substantial and will grow. It is a matter of urgency to create transparent and trustworthy conditions within which the market that is developing can progress fully. This regulation is one step in the right direction that needs to cover the whole range of investment and financial dealings. Naturally, there are and will be areas of application whose scope will be ambiguous at first. They need to be cleared, and will have to be cleared, through reasonable compromise. But the priority of placing environmental – indeed, ESG – considerations at the heart of financial markets, as this regulation is doing with a gold standard for green bonds, must be confirmed.

Mr President, this new system that we are voting upon brings the transfer of crypto funds and assets under full surveillance, even for small values. It’s a needed measure. It brings crypto assets within the scope of EU legislation on financial services. It signals that the regulatory framework applying to them will be strong and transparent. Whether we like it or not, crypto technology is here to stay. The new measures are not intended to stifle this development. So robust they could actually help to promote the EU as a crypto hub. For I am told, the technology has now reached a phase where it’s really established itself as a legitimate area of activity. Its practitioners and developers do need and do want a strong regulatory framework. Not in the US, where cacophony prevails. Their hope is the EU. Cutting-edge American developers, among the best and the brightest, are relocating to Europe. We should welcome this. Even so, I am still unsure about the understanding we have of the impact of crypto technology on market economies and financial systems. Most of the inputs and interventions we hear, feel like they’re dealing with only one or three tentacles of an octopus. We do not have a conceptual model – Keynesian, Friedmanite, or whatever – to help explain and guide the macroeconomic and macrofinancial implications of crypto developments. It feels a bit, perhaps on a larger scale, like the misgivings we had about shadow banking in the recent past. That makes me uneasy.

Mr President, two years of work are being concluded, and thanks go to our rapporteur, Mr Kelleher. DORA will now set common rules for cybersecurity protocols and for good behaviour for all financial services in the EU. It aims to ensure that all companies which manage our finances have the tools by which to withstand all types of ICT-related disruptions and operational threats. For the financial sector, cyber—risks are being countered by performance and procedural requirements, and not only, as up to now, by regulatory guidelines defining how much funds to attach to cybersecurity. The latter is a moving target. As complex cyber—threats develop, new risks will emerge. As new technologies become part of the financial system, new opportunities will emerge as well. DORA should create a common market in financial security with harmonised ICT risk-management tools, testing procedures and testing reporting methods. From the beginning, proportionality was essential to our approach, clarifying the definitions of ICT incidents and critical functions to avoid adding unnecessary heaviness. DORA will now carry several challenges. Until now, big data and the cloud have been regulated from a data perspective. They will henceforth be strictly treated as extensions of financial entities if they provide critical services. Banks and financial services rely, in fact, on a few cloud service providers. The oversight over the latter must be rigorous. When the structure of the subsidiary changes, cloud providers will have to inform the supervisory authority. This ensures that DORA is enforced without restriction on geographical location. Still, while we must deploy DORA with maximum commitment, European financial institutions need to be able to access all possible new technologies available globally as well as outside European borders. Clearly, this constitutes – and will constitute – a considerable new workload for supervisors. Regarding the input impact of DORA on SMEs, although proportionality is embedded in DORA, in reality SMEs interfacing with banks and financial services could need stringent levels of cybersecurity compliance as they might otherwise pose a risk. The greatest care must be taken in this measure to avoid crippling SMEs.

Mr President, the significant commemoration of Daphne Caruana Galizia’s horrible murder is not being enhanced by this debate. The resolution before us replicates the attitudes of many other resolutions before it. They echo the messages of right—wing splinter groups which disparaged the Malta Government on all fronts and mindlessly. Before, measures were needed; indeed, they were needed. They are being carried out in a democratic and open process of give and take. It might seem slow. But it is sure and certain and it is giving results. Reforms already effected and in the pipeline actually put Malta ahead of many other European states in the way, for instance, judicial, constitutional and police systems are or will be run. Inexorably, those responsible for Caruana Galizia’s murder have been hunted down and brought to justice within timeframes that compete reasonably well with what happens elsewhere in Europe. The process of justice and reform will continue to the end. However, this debate and the resolution attached to it will bring, I’m afraid, no value added to this process, and they do not reflect well on the objectivity and common sense of this House.

Mr President, this competition report is an opportunity for some kind of democratic scrutiny of EU action in the competition area. It is essential, however, that the report retains a strong focus on the direct impact EU competition policy has on EU citizens. Coming from a small island, which is also a Member State of the Union, I believe that state-aid rules should allow margins for proper transport connectivity among the bloc’s insular, peripheral and remote regions. For them, the medium-term future is becoming bleak. The transport connections between these regions and major European transportation hubs remain brittle and subject to disruption. This creates for their citizens and businesses a permanent economic and social disadvantage. Investment attractiveness remains below par. Tourism, a major income earner, becomes more difficult in shoulder and low seasons. General state-aid rules in this context make limited sense. Rather, air and shipping lines serving these regions need to be incentivised – subsidised if you want, so that constant and reliable transport connections are ensured. For this reason, I would like to request that colleagues support the amendment to this resolution that makes this point. The citizens of insular, peripheral and remote regions need to feel they are not a forgotten part of Europe.

Mr President, the risk facing the Pegasus Committee of this House is that it will end up mainly delivering indignant and pious platitudes about high—tech spying on governments, institutions and individuals. We all know that spying happens between friendly governments, possibly including within the EU, and between unfriendly ones. We protest strongly when it happens to us, less so when it affects those we see as unfriendly. None of us would wish to stop the development of cyber—technologies that are making invasive spying so feasible. We know that, whatever safeguards are established, they will soon become outdated. Meanwhile, secret services will continue to spy on foreign governments, on friendly governments, on political parties, as will corporations. One way forward would be clearly to identify all the actors who have an interest in cyber—spying and surveillance, and then to create an updated legal framework, for starters, on a European basis, that sets norms and limits while enabling the deployment of investigations, the issuance of sanctions and the funding of continuous research into surveillance systems and who runs them. Consideration could also be given to how advanced democracies should update their legal approaches to regulate the cyber—surveillance conducted by their own secret services.

Madam President, were Russia to invade the Ukraine as of now, it would be a gross mistake and greatly damage Russia’s standing and interests. Acknowledging this does not imply that the current impasse is solely Russia’s responsibility. Indeed, Western powers from within the EU and NATO and from outside consistently believed they had the upper—hand in any long—term face—off with Russia. They ignored Russia’s legitimate concerns about the security, intervened in its economy and broke their open—ended promises not to extend their military reach in Europe. When this helped promote regrettable authoritarianism in Russia’s governance, they consolidated the face—off further. As a result, the legitimate security and other concerns of Russia’s neighbours became constrained. They now have to consider their only protection is NATO. Should not the goal have been a European diplomatic architecture, allowing equally for the security concerns of Russia, its neighbours and Western Europe as a whole? French President de Gaulle once called for a Europe, united from the Atlantic to the Urals. German Chancellor Willy Brandt once launched his Ostpolitik. They foresaw a Europe in which both Russia and the rest of Europe occupied a meaningful space. Why has the vision been abandoned?

Mr President, the Digital Services Act aims to benefit EU citizens by providing safer and more transparent access to online platforms. The process towards an agreement in this House has, as expected, been a rather complex one. Compromises reached will not necessarily provide an enduring answer to all pending questions. This legislation should therefore be seen as a crucial step of the work in progress. Some issues that are technical and political at the same time, clearly, will need further consideration. For example, we stress the need for an ongoing audit of how digital service providers carry out their functions. But auditing firms of the accounting or legal kind – this traditional kind – cannot automatically be taken as competent or as qualified for the purposes of auditing under the DSA. Should we not therefore have some definition of professional standards by which to ensure that auditors under the DSA regime are fit for purpose? Furthermore, which precise role will financial and competition authorities be playing in the new mechanism? Then there is a wider strategic question that needs to be faced. We are assuming all the time that regulation will be enough to deal with the rise of digital services and the associated risks and conditions that have come with them. But have digital service firms operating globally become too big for regulation to be able to really cope – as, for instance, in advertising and access to information? In which case, should we not work towards breaking up into smaller units the effective global monopolies that are outpacing and will continue to outpace regulation?

Madam President, the inertia in developing the Banking Union to its logical end has made the lack of crisis news from the European banking sector sound like good news. Yet, European banks have been consistently underperforming relative to their non—European competitors for too long. Their profitability has not been too good. Generally, the European banking system is still considered too fractured to be able to compete effectively in the long term on global markets. The Green Deal, digitalisation and extensive new anti—money laundering requirements have been forcing some European banks to keep back from new and established business arrangements. In a way, the massive financial interventions of governments and the European Central Bank during the COVID—19 pandemic provided good scope for masking fundamental problems. However, they also enabled banks to survive, though many, especially at the periphery, saw their returns on equity (ROEs) go negative. Clearly, the structure of European banking will top the agenda of the day someday, not so far away. It will be a painful process, also because Banking Union has been shelved for far too long for political reasons that will, in future, appear to be paltry.

Mr President, (inaudible) important report. The EU—US relationship follows from a historic alliance between the US and the European nations. It has contributed to peace and prosperity on both sides and in the world at large. Now it needs to be rewired. The US and the EU have a different institutional political profile and different competences. Their relationship is not like a marriage, and it cannot be symmetrical, nor purely reciprocal. But problems of trust and reliability are becoming paramount. To resolve them, we need to decide on the method and on what compass the renewal of the EU—US partnership should be based. On shared values, on converging interests or on both? But is on both sensible? If I understand the resolution correctly, for instance, would it not lead the EU to blindly side with the US in some race with China, and could it hustle the EU into some premature defence union? Given the present nature and competences of the EU, would it not be better to focus first on the many converging interests that exist between the EU and the US to renew the relationship between the two?

Mr President, the EIB is the essential entity to sustain EU policy on investment and to facilitate financial support for major projects. Its newly acquired role as the EU’s climate bank makes sense. Its work in the EU’s partner countries is commendable. Still, major concerns about the bank’s operational outcomes persist. Geographical imbalances in the EIB’s lending remain a vital structural handicap. How can it be acceptable that in 2019 just four Member States between them received almost 50% of loans granted? New criteria assuring a broader geographical allocation of investments are needed. There should be a higher prioritisation for regions traditionally burdened with an investment deficit, in particular those having geographical disadvantages such as the EU’s peripheral and insular regions. Any shortfall in the general investment requirements for COVID—19 recovery and for the Green Deal will weigh most heavily on these regions. So funding strategies must be adapted to fit the geography, not least for projects related to transport and energy. Another major issue is transparency, including the sharing with MEPs of information on the EIB’s financing activities. One fails to understand the reasoning behind the EIB’s sudden decision to terminate the dissemination of its European Fund for Strategic Investments (EFSI) monthly state-of-play reports back in June 2018. A permanent mechanism of info-sharing must be in place, and the funding of approved lending per sector and per country. I look forward to continued dialogue between the European Parliament and the EIB. Together we can succeed and achieve a holistic and fair green transition of the European economy on a give-and-take basis.