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Two prominent members of the European Parliament (MEPs) closely involved with drafting payments legislation have lost their seats in this week’s election, creating uncertainty about the future of the draft laws they are negotiating.
Michiel Hoogeveen of the right-wing European Conservatives and Reformist (ECR) group and Marek Belka of the centre-left Socialists and Democrats, who were “rapporteurs” (lead negotiators) for the Financial Data Access Regulations (FIDA) and Payment Services Regulations (PSR) respectively, lost their seats in the European Parliament elections.
However, fintech advocates in Brussels will be pleased that sympathetic MEPs such as Lídia Pereira and Ondřej Kovařík, the PSD3 rapporteur, appear to have been re-elected. Kovařík, from the liberal Renew group, was not expected to retain his seat, but appears to have done so going by a post on his X (formerly Twitter) profile.
What happens next?
New rapporteurs will need to now be appointed to steer these draft laws. Lawmakers have not yet agreed on a negotiating position for FIDA. They have reached an internal agreement on PSR and PSD3, but will still need a rapporteur to lead negotiations with national governments in the EU Council.
"Regarding the PSD3 and PSR, these are sufficiently down the process to be insulated from changes, not that there would have been many barriers due to results,” said Natalie Pettinger-Kearney, head of EU regulatory and public affairs at Freshfields.
She pointed out that these have been very collaborative files that have worked well, and there seemed to be a lot of support across political groups like fraud prevention and improving anti-fraud measures. “This was popular across the board, and I think that work could be complete by the start of next year."
"What is more problematic for FIDA is that the ECR rapporteur isn't back,” she added, pointing out that this was “very touch and go whether they were going to be able to rush it through”.
She said there was a sense that the more difficult conversations were being left for the “trilogue” stage, where the Parliament negotiates with governments and the European Commission, describing this as a risky strategy.
For example, with some of the “hot topics”, such as potential gatekeeper restrictions on big tech firms being able to qualify as financial services providers, people will be wanting to slow down. “It seems like the Council has a way to go on this. I don't think it will be bumpy, but people will take their time."
When it comes to the digital euro, she said the outlook is much bleaker than it was even before the election, when politicians in Brussels were far from enthusiastic anyway.
"The digital euro is a file that overall I think is more complicated. It wasn't looking good anyway, and with the configuration in Parliament now, it feels like it is a step too far,” said Pettinger-Kearney.
Although she suggested that it is unlikely the European Central Bank will lose momentum on the issue, a lot hinges on the new commissioner for financial services and what they want to do.
A new focus or more of the same?
Emőke Péter, head of European public affairs at Worldline, suggested geopolitics will heavily influence the next five years.
Key political priorities will include competitiveness, resilience, economic security and green transition, she said, but balancing these will be challenging, with coalition formations heavily influencing the outcome.
Several political groups, including the EPP, S&D and the Greens, are eager to secure economic resilience, with a significant emphasis on strategic autonomy, she said.
But the strong surge of groups to the right of the EPP — ECR, ID and independents — may allow a right-wing coalition of political groups to vote down any legislative proposal. “That power set-up will have an impact on files, such as the digital euro,” she said. "Sovereignty will certainly be a focus.”
