MEPs put competitiveness at centre of their annual reports on banking union and competition policy

On Thursday, following plenary debates on Wednesday, MEPs adopted their annual recommendations regarding banking union and EU competition policy.

Both reports focus on how to boost EU competitiveness.

Banking union annual report

MEPs focussed on how the EU banking environment could be better designed to allow banks to lend more to businesses and consumers and thereby help improve the EU economy’s competitiveness. They also raise concerns that the current EU banking structure limits the capacity of EU banks to finance major investments. The report therefore calls on the Commission to review this structure, while taking care not to undermine financial stability.

Once again, MEPs stressed that despite the progress made over the last ten years, there can be no complete banking union without a European deposit insurance scheme. MEPs point out that much has changed since the Commission made a proposal for a deposit insurance scheme in 2015 and that the European Parliament proposed a new approach in 2024. The report also calls on member states to break the gridlock.

On resolution of failing banks, the report highlights the need for additional efforts to ensure full resolvability for all banks falling under the scope of resolution. The report also stresses the importance of a sufficient minimum requirement for own funds and eligible liabilities (MREL) to ensure the credibility of the resolution framework and underlines that resorting to using taxpayers’ money for bank resolution must be avoided.

The report was adopted with 345 votes in favour, 135 against and 62 abstentions.

Competition policy annual report

In this report MEPs make numerous recommendations about how competition law can be tweaked to improve competitiveness of EU companies.

Most importantly, they urge the Commission to press ahead with its reform of state aid rules, to do more to break up market concentrations notably in the digital, tech, online advertising and AI sectors, and to look into reviewing the Merger regulation. MEPs also want the Commission to develop a new approach to dealing with market dominance, obliging companies to structually reform rather than only adapt their business practices. The report also acknowledges the need for developing a truly European industrial policy to boost competitiveness.

The report also expresses concern about the food price crisis and notes the high levels of market concentration in food supply chains. It calls on the Commission to urgently conduct a thorough analysis of the extent and effect of buying alliances.

The report was adopted with 358 votes in favour, 124 against and 79 abstentions.