Ms Mairead McGuinness:

I thank the Chairman and the committee for the opportunity to have an exchange with members. I am two months into my role as Commissioner for Financial Services, Financial Stability and Capital Market Union. To some extent my mandate has been set out in the letter the President of the Commission, Ursula von der Leyen, sent to me on my appointment. There are a few specific areas that colleagues might like to come back on but generally, it refers to progressing banking union, capital markets union, dealing with green finance and a strategy on how we move towards a more sustainable and a more digital economy. It looks at a fintech strategy because technological solutions are coming at an advanced speed, particularly given the Covid-19 crisis.

One of the other issues we are considering in detail concerns our review of the non-financial reporting directive, whereby companies have to report not just on profit but also on how they have an impact on society, the environment, human rights, etc. We want to make sure that in future, financial and non-financial information will be equal when it comes to accounts. That is quite a leap. We already have some standards but this will be a leap forward. While Europe is doing its own thing, it is very much considering the global work on this. It is fair to say the EU is likely to move further and faster than the rest of the world when it comes to asking corporations to account for non-financial matters. It is therefore required that we scrutinise the relevant information. One point of feedback we get from investors is that they find it difficult to obtain sufficient information to compare companies. There is now much greater emphasis on this, even among asset managers and individual investors, who want to be able to say they are investing in sustainable projects. This will intensify. In the early part of next year, I will be introducing a sustainable finance strategy. There will be a very interesting debate on that. In other words, all our activities within the Commission are focused on our reorienting the European economy to make it more sustainable.

In tandem — we have seen this already because of Covid-19 — we are moving towards a more digitalised economy. That is the strategy. In the financial sector, in particular, we are aware that cash is still used but because of Covid, there is much more use of cards and instant-payment transactions without cash. That is something we are watching. We do not want to diminish the role of cash but we must make sure the solutions that are provided are regulated. While instant payment is really positive, there are clearly concerns over fraud and protecting consumers.

Another area of my work concerns anti-money laundering. Up to now, member states have had their own financial investigative units. There has been a variety of approaches among member states and no genuine European co-ordination. There is now political consensus among the member states that we need European co-ordination so a European agency to co-ordinate what is happening at member state level is required. There is support for that. We will work to make sure the financial investigative units within the member states network better and also network effectively with Europol. Therefore, there are many aspects of the work I am charged with.

One of the most far-reaching aspects of my work concerns sustainable finance. We have to try to encourage the move away from investment in projects or sectors that do harm to the climate, environment and biodiversity. The major question, which may arise in our conversation, concerns how we accommodate the transition for sectors that want to be sustainable, considering that we know, through our taxonomy, what the best is. This is quite a difficult area.

I shall mention two other issues on which questions may arise. One is the multi-annual financial framework, MFF, the future budget. As members know, there are important negotiations continuing on that. In addition, there is work on the next-generation EU fund, which involves a significant proposal regarding a very significant amount of money to help the EU to recover from the Covid crisis.

Last, I will mention Brexit. Members know the state of play. I share the pessimism of the Taoiseach when he spoke in the Dáil yesterday. In the Commission, we have particular concerns about making sure any state with access to the Single Market — in this case, the UK — plays by the rules of that market. Other issues arise, including governance and the fishing sector. Today, we are preparing contingency plans. They are very specific and very narrowly focused to make sure that in the event of no deal, which we hope will not be the outcome, specific plans will be put in place to maintain connectivity for those sectors that are vulnerable, such as transport and aviation.

While we are looking forward to the meeting that will take place between the UK Prime Minister and the President of the Commission, I am not very confident about it considering the speech made by the Prime Minister in the House of Commons today, or at least the excerpts I have read. There is a failure to understand that membership of the EU means something, that if a state is part of the EU, it is in the Single Market and customs union, and that member states make rules together. Perhaps this was a failure of Brexit at the very outset. If, as has happened, a state chooses to leave, there are consequences for it, particularly where it wants to stay part of the Single Market. The EU is doing no more than it would in any other case. What it is doing is protecting the Single Market of the EU 27, which has been built up over decades with the UK. There is a failure in the UK to understand that. This has not just arisen in recent days; it has featured from the very outset of the Brexit process.

On a slightly more optimistic note, I welcome the agreement on the implementation of the withdrawal agreement. I believed it very perverse that any country would use a statement in its Parliament that it would break international law as a threat in a negotiation. It was most unhelpful and unwelcome. The rowing back on that is welcome. It shows some understanding that it was never appropriate in the first place.

While we are hoping for a deal, we must also prepare for the possibility of there not being an agreement. We have said over weeks, months and years that time is running out. The prospect of the negotiation running into next week is really not realistic if a deal is to be ratified through the European Parliament and perhaps other parliaments. Therefore, we are running out of road. We are aware of that. In Europe, we are prepared and know what needs to be done. I hope the British Prime Minister will conclude when he comes to Brussels today that if he wants Britain to be part of the Single Market while remaining outside the European Union, it must meet the standards we have in place.