Oil prices rise after EU agrees Russian sanctions
Investing.com -- Brokerage firm Jefferies recently met with seven European Commission policymakers in Brussels to discuss the bloc’s efforts to improve corporate competitiveness, simplify regulation, and address energy and industrial policy challenges.
Following the two-day trip, the team said it is “tentatively more bullish on the prospects for European markets, excluding those related to the energy transition.”
One of the key positives was the EU’s push to streamline regulation through its Omnibus Simplification Package. These monthly legislative bundles are designed to ease administrative burdens across sectors.
The first focused on sustainable finance, and additional packages targeting defence, energy, chemicals and autos are expected by year-end. Jefferies said it was “encouraged that these efforts will reduce red tape for European corporates.”
The Commission’s renewed focus on strengthening the Single Market was another highlight. Policymakers are targeting internal barriers equivalent to a 45% tariff on manufacturing and 110% on services, according to IMF estimates.
“The EU plans to remove such barriers to build a more robust and effective bloc,” Jefferies strategists led by Luke Sussams noted.
Proposed measures include a digital product passport to unify labelling rules and frameworks for cross-border recognition of qualifications. The strategists said this strategy “seeks to knock down barriers and also put the EU in a better position to protect itself against US trade tariffs.”
On funding, Jefferies flagged three new tools being considered to raise revenues: a €2 flat fee on small international parcels, a €7 tourist entry fee for non-EU visitors, and an EU-wide digital services tax on advertising revenue. While the specific allocation of these revenues is still unclear, the broker sees potential to support broader investment needs.
On the other hand, Jefferies remains bearish on the Clean Industrial Deal, the EU’s flagship industrial decarbonization plan, describing it as “unfunded.”
The initiative is estimated to require €400 billion over 10 years, but only €100 billion has been earmarked through EU-level mechanisms. The remaining €300 billion is expected to come from the private sector.
“However, there are signs that the companies at the heart of the EU’s industrial complex are withdrawing funding from decarbonization activities, rather than expanding them. As such, we remain unconvinced the funding gap will be filled,” the strategists added.
Jefferies also expressed skepticism about the Affordable Energy Action (WA:ACT) Plan, warning that energy prices remain 3-4 times higher than in the U.S. and that proposed measures “are not entirely realistic.”
Although the Commission aims to lower electricity taxes and expand renewables, Jefferies noted that natural gas is likely to remain the marginal power price setter in the near term.