Week in Review (18 October)
Banks warned not to renege on commitments made to international Basel III measures
Olivier Guersent, director general for Financial Stability, Financial Services and Capital Markets Union at the European Commission this week warned EU banks not to expect the Commission to deviate significantly from global bank capital standards agreed under Basel III. While acknowledging that some flexibility was possible to take account of European specificities such as capital requirements for loans to unrated companies, which could constrain lending to small businesses, he warned that banks should not expect a radical divergence from the rules.
The European Banking Authority estimated that EU banks would have a €135 billion capital shortfall if the Basel standards were applied in full. However, Guersent said that the Commission expects the impact will be “much lower” than the EBA estimate due to some of the assumptions underpinning the figure.
EU Launches investigation into Apple
The European Commission announced earlier this week that it has launched a preliminary investigation into “Apple Pay”. Apple Pay is the third Apple service coming under EU investigation over the last seven months after Vestager confirmed she was looking into complaints over Apple’s alleged preferential treatment of its own Music and Screen Time apps.
Draft Budgetary Plan sent to the European Commission and seventh deadline extension for Alitalia
Another messy week for Italian politics resulted in the Government's Budgetary Plan being sent to the European Commission after the deadline set by Brussels. The overnight meeting of the Council of Ministers ended at 4am, some hours after the soft deadline. The government will now have until 31 December to work on it and to approve the final draft.
Meanwhile, on the Alitalia front Atlantia and Italian Railways received an extension on the deadline to present the new industrial plan for the Italian flag carrier for the seventh time. This time, they presented four conditions that must be met both by the government and the industrial partner (Delta Airways, for the time being) in order to proceed with their involvement in the newco.
New governments in Portugal and Romania
Following his victory in last week’s general election, Portuguese Prime Minister Antonio Costa presented to President Marcelo Rebelo de Sousa his proposal for a new government. There will be no coalition but a single party administration with the external support in Parliament of the leftist groups Left Bloc and Green Communist Alliance. Meanwhile, in Romania, the leader of the National Liberal Party (centre-right, affiliated to the EPP), Ludovic Orban, has been tasked with forming a government following the collapse of the Social Democrats’ cabinet.