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5 takeaways from Valdis Dombrovskis hearing

Valdis Dombrovskis has all-but clinched the job as the EUs top economics and financial commissioner, after easily winning the backing of MEPs following a hearing lasting nearly three hours.

The former Latvian prime minister is set to take on an expanded portfolio under the title of executive vice president for “an economy that works for people.”

His pitch to lawmakers on Tuesday included plans to promote the EUs economic interests internationally, boost green finance and add a social dimension to the blocs budget rules.

He made waves with a pledge to legislate the Libra virtual currency backed by Facebook. But there were few other meaty policy announcements.

His performance was steady with no slip-ups — but also no fireworks. Here are five takeaways from the hearing.

1. Playing it safe on money laundering

Dombrovskis was less boisterous than usual on tackling money laundering in the next Commission, following a series of scandals in the EU last year.

In July, the Latvian had said harmonizing anti-money laundering rules and introducing a single watchdog was the best course of action to tackle dirty money. His calls came in response to a Commission study, which found that many banks had in recent years prioritized profits over customer checks and national supervisors were too understaffed and distracted.

At Tuesdays hearing, however, Dombrovskis was more careful. He merely spoke of the “merits” of setting up a single watchdog. He didnt rise to the bait when Spanish Renew Europe MEP Luis Garicano asked him to pledge action within the first 100 days of the next Commission.

The cautious approach might stem from the fact that finance ministers — in the past skeptics to the idea of a role for Brussels — are set to discuss next steps to tackle dirty money on Thursday.

Making any firm commitments to lawmakers before that meeting might have been a mistake if theres ultimately no appetite from EU governments to legislate further.

2. Missing: Financial services and banking policies

The EUs two flagship policies in financial services — a capital markets union and a banking union — made only fleeting appearances.

There was little sign in the Latvians pitch of any real ambition to rejuvenate plans for a U.S.-style capital market in the bloc where companies and consumers can raise money.

Dombrovskis did set out an eye-catching pledge to create a public-private fund to help small and medium-sized enterprises go public on capital markets. Still, he offered no detail on its size and scope.

For the banking union — centralizing supervision and other responsibilities, to protect banks from domestic debt crises — Dombrovskis reiterated plans already on the Commission agenda for some time.

He backed the final piece of the puzzle — a European Deposit Insurance Scheme, long stalled before governments — as well as more work to reduce nonperforming loans and creating a backstop to the eurozones resolution fund. All well-trodden paths.

3. Green finance hits the big time

Dombrovskis made clear that green finance will be a priority. The move is part of ambitious climate targets under Ursula von der Leyens Commission.

He stressed its importance in his opening statement, including plans for a Sustainable Europe Investment Plan to unlock €1 trillion of green investments over the next decade.

The Latvian pledged this commitment would mean “fresh money” rather than moving around existing funds.

Support will come from the EU budget, more European Investment Bank lending dedicated to fighting climate change, and the Invest EU program to attract private money.

Dombrovskis would not be drawn on an exact percentage of new money to be channeled into green projects but said the EIBs lending alone would generate “many tens of billions of euros.”

Green-bond standards, an EU Ecolabel and a taxonomy to define climate-friendly products were all name-checked as well.

4. Crypto crackdown

The 48-year-old did not disappoint technology critics.

In his opening remarks during the hearing, Dombrovskis announced hed propose a law covering Libra if confirmed for another five-year term.

“Europe needs a common approach on crypto assets, such as Libra. I intend to propose new legislation on this,” Dombrovskis said, also highlighting its riRead More – Source

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