The Commission should streamline, not steamroll, financial regulation in its 2025 Work Programme

12 February 2025 - 12:26 h

Press Release

The Commission’s 2025 Work Programme puts a strong emphasis on the simplification agenda as part of its plan for “European strength and unity”, introducing three omnibus proposals and “a record number of initiatives”. However, it fails to outline a vision for a resilient, safe and inclusive financial system that would genuinely support the Programme’s stated objectives. Instead, the document shows a troubling prioritisation of deregulation.

Finance Watch urges the Commission to focus on streamlining, not steamrolling, essential policies that promote a sustainable, inclusive and competitive economy.

There is an important distinction between effective simplification and deregulation under the guise of simplification. At the moment, there is little clarity on the actual contents of the announced omnibus proposals. These files will undergo negotiations between the co-legislators, likely resulting in compromises driven by national interests and political ideologies, rather than the Commission’s objectives. Such an approach to “simplification” risks steamrolling existing regulation, creating legal uncertainty for businesses and disregarding key safeguards. This weakens policy goals that the EU has been advancing for years, undermining environmental sustainability, consumer protection and resilience of the financial system.

When it comes to financial regulation, the Work Programme shows a worrying trend: A focus on simplification efforts, with a lack of substantial reforms elsewhere, risks undoing important initiatives on sustainable finance, financial stability and consumer protection. While a focus on the “wrong priorities”, risks further undermining the Commission’s stated objectives. For instance, securitisation will not address the EU’s funding needs, nor support its competitiveness.

Spokesperson for Finance Watch

Effective simplification streamlines existing regulation, with targeted improvements based on impact assessments and the adequate consultation of stakeholders. This enhances legal certainty while making regulations more effective and proportionate. Such an approach is the only way to advance the EU’s policy ambitions and ensure its long term competitiveness.

The Commission’s objective to simplify implementation to facilitate the transition may be well-intentioned, and their objective to meet the 90% emission-reduction target for 2040 is welcome. However, the Work Programme says very little on the content of the first omnibus and the political commitment to cut reporting obligations by 25% to 35% is dangerous. Rushing this initiative risks bypassing key technical considerations, generating more legal uncertainty, doubling the cost of implementation and ultimately delaying the transition.

Spokesperson for Finance Watch

ABOUT FINANCE WATCH

Finance Watch is an independently funded public interest association dedicated to making finance work for the good of society. Its mission is to strengthen the voice of society in the reform of financial regulation by conducting advocacy and presenting public interest arguments to lawmakers and the public. Finance Watch’s members include consumer groups, housing associations, trade unions, NGOs, financial experts, academics and other civil society groups that collectively represent a large number of European citizens. Finance Watch’s founding principles state that finance is essential for society in bringing capital to productive use in a transparent and sustainable manner, but that the legitimate pursuit of private interests by the financial industry should not be conducted to the detriment of society.