Banking and finance key to sustainable reconstruction and recovery after COVID-19

By the EESC Diversity Europe Group

Commissioner Mairead McGuinness joined the lastest extraordinary meeting of the Diversity Europe Group to debate the role of finance and banking in Europe's recovery.

In his welcome address, Diversity Europe Group president Séamus Boland recommended considering the role that conventional and alternative banking systems could play in the financial recovery, especially for small socially minded businesses, the social economy sector and SMEs. The Group president saw the need for a shift to financial and banking systems that take more account of citizens' choices and preferences.

The Commissioner for Financial Services, Financial Stability and Capital Markets Union pointed out that the role played by the financial system in the recovery was crucial for a sustainable future. The pandemic and the consequences of climate change have raised awareness about the need to redirect money towards sustainability so that economies, businesses and society become more resilient to shocks.

The Commissioner said that the pandemic had brought about a tremendous acceleration in digitalisation, particularly in the financial system. "Financial stability is crucial. We are looking carefully at these innovations, which are positive, but equally we have to manage the risks that can arise from innovation and make sure that we protect citizens", she explained.

A number of members took the floor during the debate with the Commissioner. Ioannis Vardakastanis, vice-president of the Group, warned: "There will not be any economic or social recovery in Europe if financial and banking actors do not work together in the interest of the economy and society as a whole".

Regarding the digitalisation of finance, Giuseppe Guerini, spokesperson for the EESC's Social Economy Category, said it was important to strike a balance between the necessary regulation and the need to encourage innovation.

In response to the many questions from members, Commissioner McGuinness said amongst other things that the Commission was working hard to avoid a financial crisis as a result of the pandemic. It was important to prevent a build-up of non-performing loans on bank balance-sheets. Financing the recovery needs to take account of the different starting-points, as the impact of COVID-19 has varied. (jk)