Belgium, (Brussels Morning Newspaper) The European Commission proposed expansion of its authority, stressing that emergency powers would help it to tackle the crisis.
According to the draft proposal, the EC would have the power to force companies to prioritise production of some products and stockpile goods, Reuters reports on Monday.
In the proposed Single Market Emergency Instrument, the Commission notes that the US and Japan adopted similar measures and blames supply chain disruptions on the coronavirus pandemic and Russia’s aggression against Ukraine.
Companies as well as some EU member states are expected to push back against the proposal over concerns that the body’s plan presents overreach.
The draft proposal would empower the EC to manage supply chains in EU member states as well as industrial production. The body would have the authority to order countries to expand or repurpose production capacities, or to build new ones, and which goods to produce.
Critics compared the EC’s proposed expansion and centralisation of authority to the Chinese model, pointing out that the Commission would be in the position to order companies to breach their contractual obligations, among other.
In its proposal, the EC included fines for non-compliance. Businesses that fail to comply with orders on what to produce would face daily penalties until they comply, while companies that provide the body with misleading or incorrect information would face fines of up to 300,000 euro.
ECB’s new rules
Also on Monday, the European Central Bank (ECB) announced plans to introduce an environmental score for companies that will determine which way the bank tilts its corporate bond purchases.
The ECB noted that it will give each company a score based on climate disclosures, future goals and past performance, stressing that it will not disclose the scores.
The bank announced in a statement that it “will use the climate score to adjust its bids on the primary market to favour issuers with a better climate performance and to impose maturity limits on bonds from lower-scoring issuers.”
It pointed out that new rules come into effect next month and concluded that “these measures support the green transition of the economy in line with the EU’s climate neutrality objectives.”