• The cost of bank failures should primarily be borne by shareholders, creditors and industry-funded safety nets
• More banks will fall under resolution measures, and industry-funded deposit guarantee funds can be used in the resolution of a failing bank
• Retail customers and micro-, small-, and medium-sized enterprises will be better protected from incurring losses

On Thursday, MEPs adopted new rules to expand the coverage of EU rules on the orderly resolution of failed banks to minimise economic disruption and protect depositors.

The new rules broaden the scope of banks covered by the EU’s legislation on bank failure, better protecting taxpayer money. They also empower authorities to manage potential bank failures more effectively and harmonise depositor protection across the EU.

Stronger protection for depositors and better access to resolution funding

In insolvency or resolution proceedings, the deposit guarantee scheme (DGS) — the industry-funded system that protects deposits under its scope up to €100,000 and then recovers those funds as a privileged creditor — is given the highest priority in the repayment hierarchy. Retail depositors and micro-, small- and medium-sized enterprises form the second tier, followed by small public authorities such as municipalities and regional governments in the third tier, provided none of these are professional investors.

Beyond the standard EU guarantee of €100,000 per depositor per bank, certain deposits linked to real estate transactions will also be protected, ranging from €500,000 up to €2,500,000 depending on the circumstances.

Resolution of smaller banks

The resolution framework — used by governments and regulators to restructure or wind up failing banks safely while protecting depositors and financial stability — will also cover small and medium-sized banks, where this is deemed to be in the public interest.

To access external funds, a failing bank’s own investors and creditors must first absorb losses equivalent to at least 8% of the bank’s total liabilities and own funds (TLOF). The so-called “bridge the gap” mechanism allows DGS funds to help meet this 8% minimum loss-sharing requirement when a deposit-funded bank does not have sufficient loss-absorbing capacity. This facilitates a smoother transfer of the bank’s business and ensures an orderly market exit.

MEPs insisted that the conditions for using this mechanism be simplified, to keep it as a viable option for smaller banks. Member states may also allow DGS funds to be used for preventive or alternative measures — either to prevent a bank from failing or to ensure depositors can access their funds in the event of insolvency.

Quotes

Luděk Niedermayer (EPP, CZ), responsible for the BRRD said: This was a very complex file, both economically and politically. However, it makes the EU crisis management framework stronger and more coherent. It broadens the resolution system, in particular for small and medium-sized banks, improves predictability, and harmonises the use of tools across the Union. It improves safeguards for citizens, SMEs, and municipalities by clarifying how their funds will be treated in the event of a bank failure.

One of the key objectives was to reduce reliance on taxpayers’ money by promoting market-based solutions and private funding mechanisms. This was a hard-won compromise, after long and difficult negotiations. More importantly, this file will enable more agile progress towards the completion of the banking union, which is a very important part of the EU’s key agenda to improve the functioning of the single market.

Irene Tinagli (S&D, IT), responsible for the SRMR, said: The reform of bank crisis management and deposit insurance framework marks a decisive improvement, making resolution more credible and accessible for small and medium-sized banks, while preserving a prudent framework with loss-absorbing capacity as the first line of defence. At the same time, the agreement strengthens the effective use of industry-funded instruments within a clear and robust framework. It also safeguards the integrity and independence of European governance, ensuring consistency, legal certainty, and greater harmonisation across the banking union. This represents a clear step forward in reinforcing financial stability and integration, while underlining the need for further progress towards a fully-fledged European deposit insurance scheme (EDIS) to complete the banking union.

Kira Marie Peter-Hansen (Greens/EFA, DK) responsible for the DGSD, said: In today’s volatile geopolitical and economic environment, it is more important than ever to have a robust and resilient regulatory framework that enables banks to continue to finance the real economy throughout the economic cycle. The adoption of the crisis management and deposit insurance (CMDI) review, and in particular of the Deposit Guarantee Scheme Directive, is an important first step in that direction and towards the completion of banking union. The main objectives of this review have been achieved. The scope of the resolution has been expanded, while still providing sufficient safeguards to ensure that deposit guarantee schemes remain sufficiently funded. At the same time, we have harmonised the deposit guarantee scheme toolbox, moving towards a more integrated European banking sector. Nonetheless, these are targeted reforms. More ambitious action will be needed to finally complete the banking union, including a fully-fledged European deposit insurance scheme.

Background

The package comprises three legislative files: the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the Deposit Guarantee Schemes Directive (DGSD).

Next steps

The new rules enter into force on the twentieth day following the publication in the Official Journal of the European Union and will apply (with some exceptions) from 24 months from entry into force.

2025 was the worst wildfire season in Europe since records began. With climate change, the risk of wildfires is increasing, both in terms of intensity and frequency. The Commission has put forward a new approach to wildfire risk management, with a strategy that provides guidance on how to better prevent, prepare for, respond and recover from wildfires. This will enhance Europe’s resilience to wildfires and help protect both people and the environment.

Restoring Europe’s nature is key, since healthy and well-managed ecosystems can reduce the risk and impacts of extreme events. This is where the emphasis on prevention comes in, and why the Commission is

• providing advice on how to approach climate adaptation on Natura 2000 sites, and how to promote resilient landscape planning
• explaining how EU countries can manage Natura 2000 sites in case of emergency situations
• proposing EU countries integrate wildfire prevention and preparedness into spatial planning 

To help prepare, the Commission will also 

• assist EU countries in their long-term planning with updated risk assessment guidelines
• look to involve citizens in wildfires preparedness in line with the preparedness union strategy
• continue to pre-position firefighters in risk areas and promote the exchange of firefighting experts
• further develop the European Forest Fire Information System, to improve its early warning and fire monitoring tools
• build European risk modelling , including prioritising AI-assisted wildfire modelling tools

Better planning will of course also help to better respond to wildfires. To further support response efforts, the rescEU firefighting fleet will be expanded with the procurement of 12 firefighting planes, as well as five helicopters. 

In terms of recovery after wildfires, the Commission proposes to collect data to better understand the long-term health risks firefighters face, due to dangerous conditions and toxic substances. It will also work to share best practices for post-fire recovery methods, and support post-disaster restoration towards more climate-resilient ecosystems.

To implement all of these measures, the Commission will work closely with EU countries, regions, the civil protection community, land managers and other stakeholders. Progress will be regularly reviewed and reported to the relevant EU institutions.

Breaking News! White smoke for Mairead McGuinness. – Human Rights Without Frontiers hails this appointment 

Human Rights Without Frontiers // PRESS RELEASE // This Thursday 26 March at lunch-time, the office of MEP Bert-Jan Ruissen has just published on the name of the European Parliament’s Intergroup on Freedom of Religion or Belief a press release announcing the appointment of a new EU Special Envoy on FoRB.

Human Rights Without Frontiers hails the appointment of a new EU Special Envoy for FoRB outside the EU and welcomes the choice of Mairead McGuinness, a highly qualified person for this mission. The function falls under the remit of Magnus Brunner, the current commissioner for internal affairs.

McGuinness is an Irish politician who served as the European Commissioner for Financial Stability and Financial Services from 2020 to 2024.

She previously served as Member of the European Parliament from 2004 to 2020, sitting with the European People’s Party (EPP), and as First Vice-President of the European Parliament from 2017 to 2020.

In this capacity, she had responsibility for the implementation of Article 17 of the Lisbon Treaty, which governs dialogue between EU institutions and churches, religious associations and non-confessional organizations.

McGuinness also highlighted the European Parliament’s role in shaping EU Guidelines on Freedom of Religion or Belief, including consultation during their drafting. She supported greater awareness and implementation of these guidelines globally. This document was adopted on 24 June 2013.

End of June 2023, Human Rights Without Frontiers celebrated the 10^th Anniversary of the Guidelines with an international conference organized at the European Parliament under the auspices of MEP Peter van Dalen and MEP Carlo Fidanza, co-chairs of the Intergroup on Freedom of Religion or Belief.

Since the end of the full mandate of the very first EU Special Envoy, Jan Figel, on 30 November 2019, the European Commission has only appointed two Special Envoys for short periods: Christos Stylianides (Cyprus), who left after 4 months, and Baron Frans van Daele (Belgium), a retired diplomat, for 2 years.

It cannot be kept silent that during the 10 years and a few months of existence of the post of EU Special Envoy for freedom of religion or belief in the world, the mandate has only been carried out for 5 years despite all the pressing calls of the MEPs and civil society. This shows a persistent lack of political will to defend freedom of religion or belief outside the EU

The Council of Europe (CoE) has very recently appointed a Greek Special Representative against all forms of religious intolerance and in the meantime a number of EU member states have also put in place their own Special Representatives on FoRB.