This Week in Finance — Brussels (#17, 2026)
Commission approves €813m State aid for Lithuanian development bank; NextGenerationEU payments reach €400bn; Council flags excessive deficit in Finland; Parliament committees debate securitisation reforms.
May 03, 2026 to May 09, 2026
Commission approves €813m State aid for Lithuanian development bank; NextGenerationEU payments reach €400bn; Council flags excessive deficit in Finland; Parliament committees debate securitisation reforms.
📋 In This Week's Newsletter
• 🇪🇺 European Commission
• ⚖️ EU Legislation
• 🤝 EU Council
• ✒️ EP Committee Work
• 📚 What We're Reading This Week
European Commission
Commission approves over €800 million in State aid to Lithuanian development bank
The European Commission on 4 May 2026 approved State aid measures for the Lithuanian development bank 'Investicijos į Lietuvos ekonomiką' (ILTE), totalling €813 million in capital injections and €15 million per year in tax and dividend exemptions. The Lithuanian Ministry of Finance notified these measures to enhance ILTE’s capacity to fund projects in sectors facing market failures, including agriculture, renewable energy, district heating, building refurbishment, transport, digital, and social infrastructure. The Commission assessed the measures under Article 107(3)(c) of the Treaty on the Functioning of the EU, confirming their necessity, proportionality, and appropriateness while noting Lithuania’s commitments to avoid crowding out private financial institutions. The approval follows the Commission’s review of the four cumulative State aid conditions and Lithuania’s compliance with relevant limitations and safeguards. The non-confidential version of the decision will be published under case number SA.120268 in the State aid register.
Payments under NextGenerationEU reach €400 billion
On 4 May 2026, the European Commission announced that total disbursements under the Recovery and Resilience Facility (RRF) surpassed €400 billion, with €4.6 billion allocated to Germany and €1.25 billion to Slovakia. Germany’s third payment supports digital public administration, energy-efficient building renovations, and hydrogen research, while Slovakia’s sixth and seventh payments cover education, healthcare, and renewable energy reforms. To date, Germany has received 80% of its €30.3 billion grant allocation and Slovakia 81% of its €6.4 billion allocation. With the RRF set to conclude at the end of 2026, Member States must complete all milestones by August 2026 and submit final payment requests by September 2026. The Commission highlighted the Facility's role in supporting climate, digital, and structural reforms across Member States.
Commission greenlights Austria's fourth payment request under NextGenerationEU
On 6 May 2026, the Commission issued a positive assessment of Austria’s fourth payment request for €325 million under the Recovery and Resilience Facility. Austria has completed nine milestones and eight targets tied to reforms in the green transition, digitalisation, health, and education. Key measures include the installation of residential photovoltaic systems, support for zero-emission transport, funding for green business investments, device repair schemes, and expansion of digital research infrastructure. Austria has now received €3.66 billion under the Facility, covering 92% of its plan’s grant total. The Economic and Financial Committee has four weeks to deliver its opinion on the Commission’s preliminary assessment before final payment approval.
Remarks by Commissioner Dombrovskis at ECOFIN press conference: Ukraine support, VAT fraud, and regulatory reform
On 4 May 2026, Commissioner Valdis Dombrovskis addressed the ECOFIN press conference, reporting progress on the Ukraine Support Loan and the adoption of the EU’s 20th sanctions package against Russia. The Commission confirmed ongoing efforts with Ukrainian authorities to finalise financing agreements for macro-financial assistance. Dombrovskis presented the Better Regulation Communication, introducing a Regulatory Deep Cleaning Action Plan, including banking regulation simplification. He noted that the Markets Integration and Supervision Package was discussed with broad support from ministers. Direct access to EU-level VAT information was granted to the European Public Prosecutor’s Office and OLAF to enhance the fight against cross-border VAT fraud.
Remarks by Commissioner Dombrovskis at Eurogroup press conference: economic outlook and banking sector resilience
On 3 May 2026, Commissioner Dombrovskis assessed the EU economic outlook in light of rising energy prices following the Middle East conflict, projecting weaker growth and higher inflation. He underlined the importance of temporary, targeted support measures to preserve fiscal stability and referenced the AccelerateEU Communication for effective policy options. The Commission discussed improving financing for innovative ventures and committed to maintaining bank sector resilience, especially on cybersecurity. The findings of the public consultation on the European banking sector’s competitiveness, which closed on 19 April, will be published later in 2026.
EU Legislation (Official Journal)
Council Decision (EU) 2026/1025: Excessive deficit procedure opened for Finland
On 6 May 2026, the Official Journal published Council Decision (EU) 2026/1025, confirming the existence of an excessive deficit in Finland under Article 126(6) TFEU. The decision follows Eurostat data showing Finland’s general government deficit at 4.4% of GDP in 2024 and a planned 4.3% in 2025, both above the 3% reference value. The Council concluded the excess was not temporary and not solely due to increased defence expenditure, thereby activating the excessive deficit procedure.
Regulation (EU) 2026/995: Efficiency of External Action Guarantee improved
Regulation (EU) 2026/995, adopted on 29 April 2026 and published 4 May, amends Regulation (EU) 2021/947 to enhance the efficiency of the External Action Guarantee. The amendments allow the use of EFSD guarantee surpluses for provisioning the EFSD+ guarantee, reduce EU liability for EIB operations from 65% to 60%, and simplify reporting by development finance institutions. The aim is to increase support for strategic investments and streamline EU external action financing.
Decision (EU) 2026/1048: Discharge for Single Resolution Board budget implementation 2024
Decision (EU) 2026/1048, signed by the Single Resolution Board on 14 April 2026 and published 8 May, grants discharge to the Chair of the SRB for the implementation of the 2024 budget and approves the closure of the SRB’s accounts for that year. The Decision is based on the 2024 Annual Report, the European Court of Auditors’ Annual Report, and the PKF 2024 Audit Report. The SRB is instructed to notify the Council, Commission, and Court of Auditors.
EU Council
ECOFIN: VAT fraud rules and market integration package discussed
On 5 May 2026, the Economic and Financial Affairs Council (ECOFIN) adopted new rules to strengthen the fight against VAT fraud in the EU. Ministers also held a policy debate on the market integration and supervision package, a core element of the EU’s Savings and Investment Union.
Eurogroup: Impact of Middle East conflict and financial sector resilience
At its meeting on 4 May 2026, the Eurogroup reviewed the economic effects of the Middle East conflict on the EU and discussed measures to address the crisis. Ministers also heard from the Chairs of the Single Supervisory Mechanism and Single Resolution Board on bank resilience, cybersecurity, and artificial intelligence.
EP Committee Work
ECON Committee: Public hearing on Market Integration and Supervision Package (MISP)
On 5 May 2026, the Committee on Economic and Monetary Affairs (ECON) held a public hearing on the Market Integration and Supervision Package (MISP). Invited speakers included Nikolaj Kosakewitsch (Nasdaq Copenhagen), Niamh Moloney (LSE), Edwin De Pauw (Euroclear), and Verena Ross (ESMA). The hearing addressed asset management sector fragmentation, cross-border provision of depositary services, intra-group arrangements, supervisory convergence, and the integration of distributed ledger technology in market infrastructure.
ECON Committee: Securitisation reforms—maintaining transparency, reducing costs
On 5 May 2026, the ECON Committee voted on proposed reforms to the simple, transparent, and standardised (STS) securitisation framework and risk adequacy. The reforms differentiate transparency and reporting requirements for public and private securitisations, adjust due diligence procedures, and propose changes for third-country issuers. The Committee also called for enhanced cooperation among EU supervisory authorities and clarified the capital treatment of securitisation positions.
ECON Committee: Eurogroup President Pierrakakis exchange on economic priorities
On 5 May 2026, the ECON Committee engaged in an Economic Dialogue with Eurogroup President Kyriakos Pierrakakis. Topics included the digital euro, the completion of banking union, and preparations for rapid technological changes, with Pierrakakis highlighting the need for a European 'technological doctrine' and a more proactive stance on economic challenges.
ECON Committee: Reports on prudential requirements for securitisation exposures
On 8 May 2026, rapporteur Ralf Seekatz (EPP) presented the Committee’s report on the proposal to amend Regulation (EU) No 575/2013 regarding credit institutions’ prudential requirements for securitisation exposures. The report covers changes to risk weights and aims to increase risk sensitivity in capital treatment.
ECON Committee: Report on amendments to the Securitisation Regulation
On 8 May 2026, rapporteur Ralf Seekatz (EPP) presented the Committee’s report on the proposal to amend Regulation (EU) 2017/2402, which establishes the framework for simple, transparent, and standardised securitisation. The report outlines revisions to requirements for transparency, due diligence, and supervision.
ECON Committee: Opinion on the European Competitiveness Fund
On 5 May 2026, rapporteur Danuše Nerudová (PPE) published the Committee’s opinion on the proposal for a regulation establishing the European Competitiveness Fund (ECF), including defence research and innovation activities. The opinion addresses the regulatory framework for the ECF and the integration with existing EU financial programmes.
What We're Reading This Week
- Bank of England's Bailey sees 'wrestle' with US on stablecoin regulation: Bank of England Governor Bailey signals potential regulatory clashes with the US over stablecoin oversight and international coordination.
- EUROPEAN COMMISSION Brussels, 4.5.2026 C(2026) 2867 final COMMISSION DELEGATED REGULATION (EU) …/... of 4.5.2026 supplementin: European Commission issues new delegated regulation to supplement existing EU legislation, impacting compliance requirements across member states.
- Rumble Announces Receipt of all Regulatory Approvals for Business Combination with Northern Data: Rumble clears final regulatory hurdles, paving the way to complete its business merger with Northern Data.
- FISMA - Commission seeks feedback on revised sustainability reporting standards: Stakeholders are invited to provide input on updated sustainability reporting standards as part of ongoing regulatory improvements.
- SRB Bi-annual reporting note to Eurogroup – May 2026: The Single Resolution Board presents its latest progress report and key updates on bank resolution to the Eurogroup.
