This Week in Finance — Brussels (#19, 2026)
Spring 2026 Economic Forecast warns of energy impacts; EIC appoints EQT for €5bn Scaleup Fund; new insurance technical standards; CEB negotiations with EU authorised.
May 17, 2026 to May 23, 2026
Spring 2026 Economic Forecast warns of energy impacts; EIC appoints EQT for €5bn Scaleup Fund; new insurance technical standards; CEB negotiations with EU authorised.
📋 In This Week's Newsletter
• 🇪🇺 European Commission
• ⚖️ EU Legislation
• 🤝 EU Council
• ✒️ EP Committee Work
• 📚 What We're Reading This Week
European Commission
Commissioner Dombrovskis presents Spring 2026 Economic Forecast and addresses Eurogroup
Commissioner Valdis Dombrovskis delivered remarks in Nicosia at the Eurogroup press conference, outlining the European Commission's Spring 2026 Economic Forecast. He identified an energy shock triggered by the Middle East conflict, projecting higher inflation and slower GDP growth across the EU, with headline inflation expected to reach 3.1% in 2026 and GDP growth to slow to 1.1%. Dombrovskis noted that thirteen Member States could record deficits above 3% of GDP by 2027 as public finance pressures increase. The Commissioner also reported on recent negotiations regarding the digital euro and referenced the European Affordable Housing Plan and the need for increased housing supply. The Commission reaffirmed its readiness to provide technical support to facilitate legislative progress on the digital euro.
Spring 2026 Economic Forecast: Slowdown amid energy shock and inflation rise
The Commission published its Spring 2026 Economic Forecast on 20 May, projecting GDP growth in the EU to decelerate to 1.1% in 2026, revising earlier predictions downward. Inflation is now forecasted at 3.1% in the EU for 2026, up by one percentage point compared to autumn estimates, mainly attributed to surging energy prices after renewed conflict in the Middle East. The report highlights ongoing challenges to labour markets and rising debt ratios, with the average EU government deficit set to climb to 3.6% of GDP by 2027. Risks related to the persistence and impact of the energy shock, including on supply chains and public finance, are noted as critical uncertainties in the outlook.
EIC selects EQT as manager for €5 Billion Scaleup Europe Fund
EQT was chosen as the preferred investment adviser and fund manager for the European Innovation Council’s €5 billion Scaleup Europe Fund. Announced on 17 May, the selection follows a public call for interest and multiple evaluation rounds. The fund, due to be presented at the EIC Summit on 3 June 2026, will target late-stage financing for European deep-tech scaleups in sectors including AI, quantum computing, and fintech—addressing historic investment gaps and aiming for first investments in autumn 2026. Founding investors include Novo Holdings, Danish EIFO, Santander/Mouro Capital, and Allianz. The operational launch of the fund depends on completion of legal agreements and approval processes.
Commission releases €158.9 million under EU Growth Plan for the Western Balkans
The Commission disbursed €158.9 million to Albania, Montenegro and North Macedonia under the Reform and Growth Facility. The funds support national reforms on business competitiveness, innovation and education—key to integrating these partners into the EU Single Market. The payments, linked to progress under Reform Agendas, are channelled both as budget support and for investment projects through the Western Balkans Investment Framework. The Growth Plan’s total funding envelope is €6 billion under the Facility through 2027.
Commission approves Lithuania’s sixth payment under Recovery and Resilience Facility
Lithuania received a positive eligibility assessment for its sixth payment request of €178 million in grants within the NextGenerationEU Recovery and Resilience Facility. The assessment, published on 17 May, is tied to completion of reforms in digitalisation, public administration transparency, social protection, and inclusion. With this payment, Lithuania will have received €2.8 billion out of its €3.85 billion allocation, representing about 74% of its plan. Final payment is conditional upon review by the Council’s Economic and Financial Committee.
EU and Mexico sign Modernised Global Agreement and interim Trade Agreement
On 21 May, the EU and Mexico signed a Modernised Global Agreement (MGA) and an interim Trade Agreement (iTA) at the 8th EU-Mexico Summit. President Ursula von der Leyen, Council President António Costa, and Commissioners Kaja Kallas and Maroš Šefčovič represented the EU. The agreements update the bilateral trade and cooperation framework, with enhanced provisions for financial services, digital regulation, sustainable finance, and public procurement. The MGA will undergo ratification procedures by EU Member States, while the iTA will enter into force after completion of EU-level legislative steps.
EU-Mexico Summit reiterates alignment on strategic, economic, and financial priorities
The joint statement from the EU-Mexico Summit of 22 May confirmed shared commitment to multilateralism, financial architecture reform, and social investment—including support for Ukraine and cooperation on growth plans for the Western Balkans and Moldova. The partners announced a plan to deepen cooperation in financial services, digital innovation, and supporting investment frameworks such as Global Gateway. The summit outlined intentions to launch new sectoral dialogues, including on financial regulation and digital economy.
EU Legislation (Official Journal)
New technical standards for insurers under Solvency II: Implementing Regulation (EU) 2026/1094
The Commission adopted Implementing Regulation (EU) 2026/1094 on 21 May 2026, establishing technical information for the calculation of technical provisions and basic own funds under Directive 2009/138/EC (Solvency II) for reporting by insurers and reinsurers with reference dates from 31 March to 29 June 2026. The regulation prescribes risk-free interest rate term structures, fundamental spreads for the matching adjustment, and volatility adjustments for all relevant currencies and national markets, reflecting inputs provided by EIOPA and mandatory for prudential reporting in this period.
Council Decision (EU) 2026/1138: Negotiating EU membership terms in the Council of Europe Development Bank
Council Decision (EU) 2026/1138, published 21 May 2026, authorised the opening of negotiations between the EU and the Council of Europe Development Bank (CEB) regarding the conditions for EU membership. The decision mandates the Commission as negotiator and defines consultation arrangements with the Council, aiming to align EU priorities in social policy and financial support—especially in fields such as affordable housing, healthcare, and regional inclusion.
Council Decision (EU) 2026/1096: EEA Joint Committee amendment on financial benchmarks
Council Decision (EU) 2026/1096 of 11 May 2026 sets the EU’s position for an EEA Joint Committee amendment to Annex IX (Financial Services) of the EEA Agreement. The decision concerns supervision of certain benchmark administrators by ESMA, incorporating Commission Delegated Regulations (EU) 2022/804, 2022/805, and 2024/1705. The text establishes procedural rules and fee structures for ESMA-supervised administrators, extending relevant EU financial services law to the EEA.
EU Council
Eurogroup examines spring macroeconomic outlook, housing policy, and digital euro progress
The Eurogroup convened on 22 May to review the Commission's Spring Economic Forecast, consider euro area public finances under energy price shocks, and discuss affordable housing policy options. Ministers also received an update on the state of play of the digital euro project.
ECOFIN ministers hold informal economic and financial affairs meeting
An informal meeting of economic and financial affairs ministers was held on 22 May. No official summary of deliberations was provided.
EP Committee Work
ECON MEPs on delegation to Canada for digital finance and regulatory talks
The Economic and Monetary Affairs (ECON) Committee will undertake a delegation visit to Ottawa and Toronto from 26–28 May. Led by Ludek Niedermayer (EPP, CZ) and Javier Moreno Sánchez (S&D, ES), agenda items include exchanges with the Canadian FINA Committee on digital finance, central bank digital currencies, banking supervision, and financial market regulation, as well as stakeholder meetings with the Bank of Canada, Toronto Stock Exchange, and representatives on sustainable finance.
FISC MEPs travel to Brasília for exchanges on global tax reform
A delegation of the European Parliament Subcommittee on Tax Matters (FISC), led by Pasquale Tridico (The Left, IT), will meet officials in Brazil—including Minister of Finance Dario Durigan and Parliament committees—from 22 May. The mission focuses on OECD/G20 international tax reform, digital taxation, and the taxation of ultra-high-net-worth individuals.
Parliament approves new foreign investment screening rules for strategic EU sectors
The Committee on International Trade (INTA) confirmed Parliament’s approval of new mandatory screening procedures for foreign investments in sensitive EU sectors, including financial services. The reform aims to address economic security and public order risks, streamlining national review processes and enhancing Commission coordination. Rapporteur Raphaël Glucksmann (S&D, FR) noted this law marks a turning point in protecting critical assets.
CONT Committee opinion on Council regulation: enhanced VAT information sharing for EPPO and OLAF
The Committee on Budgetary Control (CONT), rapporteur Gilles Boyer, issued an opinion on 20 May regarding a proposal to amend Regulation (EU) No 904/2010 for enhanced access by the European Public Prosecutor’s Office (EPPO) and the European Anti-Fraud Office (OLAF) to VAT information at EU level. The opinion addresses cross-border VAT fraud investigations and recommends improved institutional data exchange mechanisms.
What We're Reading This Week
- Greek stocks vs. Nasdaq 100: Which market won in the last 5 years?: Greek equities have outperformed the tech-heavy Nasdaq 100 over the past five years, defying expectations about market growth.
