CEE Perspective Weekly Digest- Issue 19

EU institutions reaffirm commitment to delivering Single Market reforms by 2027

On 15 October, the presidents of the European Parliament, the Council of the EU and the European Commission reviewed progress under the “One Europe, One Market” roadmap, reaffirming their commitment to advancing key reforms by the end of 2027. The initiative seeks to address persistent barriers to the movement of capital, services, energy and innovation, while reducing administrative burdens and strengthening Europe's competitiveness. The review comes as major elements of the Savings and Investments Union (SIU) agenda, including proposals on market integration and supervision, move through the legislative process. 

The European Council's conclusions of 15–16 October further reinforced this agenda, calling for progress on key competitiveness initiatives, including the proposed 28th company-law regime, the Industrial Accelerator Act and the European grids package. Leaders also stressed the need to address high energy prices and advance negotiations on the EU's next long-term budget to ensure funding can begin in 2028. 

The renewed commitment highlights the growing importance of implementation. Despite progress towards a more integrated Single Market, differences in national rules, administrative procedures and market practices continue to raise costs for businesses and financial institutions operating across borders. The SIU agenda, the proposed EU Inc. framework and wider simplification efforts address different aspects of these challenges. Their effectiveness will depend not only on legislative agreement but also on coherent implementation and the removal of barriers that persist at national level. 

What this means for CEE markets: For smaller and less integrated capital markets, reducing cross-border barriers could make it easier for businesses to access investors, financial intermediaries to expand their services and growing companies to operate across the EU. The real test will be whether the reforms deliver measurable improvements in financing conditions, market access and the availability of growth capital, including for smaller issuers and firms outside Europe's largest financial centres. 

European supervisors set 2027 priorities, with digital resilience at the forefront

The European Supervisory Authorities (EBA, EIOPA and ESMA) have published their Joint Committee Work Programme for 2027, setting out shared priorities for financial-sector regulation and supervisory coordination. Digital operational resilience will remain a central focus, alongside sustainable finance, securitisation, consumer protection and the monitoring of emerging financial technologies. 

A major area of work will be supporting the implementation of the Digital Operational Resilience Act (DORA) and contributing to its forthcoming review. The authorities expect to provide technical advice to the European Commission in preparation for a potential legislative proposal. This comes as financial institutions continue adapting their ICT risk-management, incident-reporting and third-party oversight arrangements. The programme also envisages further work on innovation-related risks, including artificial intelligence and tokenisation. 

Other priorities will depend partly on the progress of ongoing legislative negotiations. Under the review of the Sustainable Finance Disclosure Regulation (SFDR), the authorities may be tasked with developing technical standards to support the revised framework. They will also follow developments in the EU securitisation reform and could undertake additional work on retail-investor disclosures under the PRIIPs framework. Across these areas, supervisory convergence and regulatory simplification remain important objectives. 

What this means for CEE markets: Greater consistency in EU supervision could benefit financial institutions operating across smaller and more fragmented markets, particularly where divergent national practices increase compliance costs and complicate cross-border activity. At the same time, the emphasis on digital resilience reflects the growing importance of managing cybersecurity, ICT and technology-provider risks. The practical impact will depend on whether future supervisory requirements improve regulatory clarity and resilience without creating disproportionate burdens for smaller institutions.

Figure 1. European Supervisory Authorities' priorities for 2027: Key areas of work and potential implications for CEE financial markets. Source: CEE Perspective illustration, based on the ESAs' Joint Committee Annual Work Programme 2027. 

EU long-term budget negotiations expose competing investment priorities

EU Member States continued discussions on the next Multiannual Financial Framework (MFF) for 2028–2034 at the General Affairs Council on 13 October. The Irish Presidency's revised negotiating proposal envisages a €1.62 trillion budget for 2028–2034, representing an 8% (€141 billion) reduction compared with the European Commission's initial proposal. The compromise seeks to balance fiscal restraint with continued support for cohesion and agriculture, alongside growing investment needs in competitiveness, research and defence. 

The negotiations reflect the challenge of accommodating established investment needs alongside increasing demands for defence, resilience and competitiveness spending. Beyond the headline budget, the design of funding programmes will be equally important. Eligibility conditions, national co-financing requirements and the balance between grants, guarantees and other financial instruments will shape how effectively EU resources support investment and mobilise private capital. 

What this means for CEE markets: The outcome will be particularly consequential for CEE economies, where EU funding plays an important role in financing transport and energy infrastructure, regional development, innovation and business investment. Changes to cohesion allocations or programme design could affect countries differently, depending on their investment needs and capacity to absorb funds. Ensuring that EU financing instruments remain accessible to smaller businesses and can effectively complement private investment will be important for supporting the region's competitiveness and long-term economic convergence.

Lithuania emerges as a leading hub for cross-border retail investment services

The European Securities and Markets Authority (ESMA) reported on 14 October that the number of retail clients receiving cross-border investment services across the EU and EEA reached 15.5 million in 2025, an increase of 47% compared with 2024. The services were provided by 379 investment firms and credit institutions. Lithuania accounted for approximately 4.9 million clients, ahead of Cyprus (4.2 million) and Germany (3 million), while reported complaints remained broadly stable at 10,945. 

The findings highlight Lithuania's growing role as a base for financial firms serving customers across the European single market. They illustrate how EU passporting and digital distribution can enable firms to expand beyond their domestic markets, while the concentration of millions of clients in a few home jurisdictions raises questions about supervisory capacity and investor protection. 

For CEE markets, Lithuania offers an example of how smaller economies can develop internationally oriented financial-services sectors without relying solely on domestic demand. The challenge is to ensure that supervisory arrangements and operational resilience keep pace with cross-border growth. This is particularly relevant as the EU considers further measures to deepen capital-market integration and strengthen supervisory convergence. 

Figure 2. Top five home Member States by number of cross-border retail investment clients, 2024–2025 (thousands). Source: ESMA, Report on the 2025 cross-border provision of investment services to retail clients in the EU and EEA, 14 October 2026. 

Ukraine's EU accession negotiations advance, reinforcing the long-term investment agenda

The EU and Ukraine opened negotiations on two additional accession clusters on 13 October, covering the internal market and competitiveness and inclusive growth. Together, these clusters comprise 17 negotiating chapters, including the free movement of capital, financial services, competition policy, enterprise development and economic and monetary policy. The EU also established benchmarks for the future provisional closure of the chapters. 

Progress on the free movement of capital and financial services is particularly relevant to Ukraine's longer-term investment prospects. Greater alignment with EU financial-market rules could gradually reduce regulatory uncertainty, facilitate cross-border financing and improve conditions for European financial institutions considering investment in the country. However, security risks, financing constraints and the capacity to implement reforms remain significant obstacles. 

For the wider CEE region, Ukraine's economic integration could strengthen cross-border investment, banking relationships and financing opportunities linked to reconstruction. Neighbouring economies may play an important role in connecting Ukraine with EU financial markets and supporting investment in infrastructure and productive capacity. The accession process provides a longer-term framework for these developments, although tangible benefits will depend on sustained reform, financing and implementation. 

EBRD commits €40 million to support private-equity investment across CEE

The European Bank for Reconstruction and Development (EBRD) announced an investment of up to €40 million in Avallon MBO Fund IV, a private-equity fund targeting €220 million in commitments. The fund will support established SMEs and small mid-cap companies, with at least 70% of its commitments allocated to Poland and up to 30% available for investments elsewhere in CEE, including Romania, Bulgaria, Croatia, Czechia and the Baltic states. 

The investment highlights the role of international financial institutions in developing CEE's private-capital markets. Many growing businesses across the region remain heavily dependent on bank lending, with more limited access to long-term equity and risk capital. Private-equity financing can help diversify funding sources while supporting business expansion and ownership transitions. 

Beyond the individual transaction, the EBRD's participation could help mobilise additional institutional investment and strengthen the region's private-equity ecosystem. This is particularly relevant for smaller markets, where fundraising conditions and the limited availability of growth capital can constrain companies' ability to scale. 

Moldova expands SME credit guarantees, adding support for energy storage investment

Moldova's Competition Council approved an increase of MDL 128 million (approximately €6.4 million) to the budget of the state-backed IMM GARANT scheme on 13 October, raising its total allocation from MDL 138.2 million to MDL 266.2 million. Managed by the Organisation for Entrepreneurship Development (ODA), the programme helps SMEs access financing by providing guarantees that supplement the collateral required by lenders. 

The amendments also introduce specific provisions for battery energy storage projects, allowing guarantees covering up to 50% of eligible financing for investments in new equipment.The scheme remains authorised until the end of 2028. 

The expansion illustrates how public guarantee instruments can address financing constraints while supporting investment in strategic sectors. For Moldova, where smaller businesses may face difficulties securing sufficient collateral, such mechanisms can help mobilise bank lending and facilitate productive investment. The inclusion of energy storage also connects SME financing with the country's wider energy infrastructure and resilience needs. 

Romania's private pension assets reach RON 246 billion, strengthening the institutional investor base

Recently published figures from Romania's Financial Supervisory Authority (ASF) highlight the continued expansion of the country's private pension system. According to data released on 8 October, assets under management reached RON 246.2 billion at the end of June 2026, an increase of 39% year-on-year. Private pension assets represented approximately 12.35% of GDP, while the system counted around 9.64 million participants. Of the total assets, RON 237.4 billion were managed by mandatory Pillar II funds and RON 8.78 billion by voluntary Pillar III funds. 

The growth is significant not only for retirement savings but also for the development of Romania's domestic capital markets. According to the ASF, around 67% of private pension assets were invested in fixed-income instruments and 29% in equities, with portfolios remaining predominantly oriented towards the domestic market. As the system expands, pension funds are becoming an increasingly important source of long-term institutional capital, while remaining focused on their primary objective of providing retirement income for savers. 

For CEE markets, Romania's experience illustrates the connection between funded pension systems and capital-market development. As pension assets accumulate, the availability of suitable long-term investment opportunities becomes increasingly important. Strengthening market depth, liquidity and access to diversified instruments can help pension funds fulfil their retirement objectives while contributing to the broader development of regional financial markets.

• 19–22 October - European Parliament plenary, Strasbourg: MEPs are scheduled to debate EU budget priorities and longer-term spending plans, the outcome of the 15–16 October European Council, environmental policy and passenger rights. The discussions will provide further indications of Parliament's positions on EU investment and competitiveness priorities.

• 20 October – European Commission's 2027 Work Programme: The Commission is expected to adopt its annual work programme, outlining legislative and policy priorities for the coming year, alongside its annual overview of simplification, implementation and enforcement. The documents will provide an indication of the next steps in the EU's competitiveness, financial-services and regulatory simplification agendas.

• 19 October - Employment and Social Policy Council, Luxembourg: Ministers will discuss the forthcoming Quality Jobs Act and are expected to adopt a recommendation on tackling housing exclusion and homelessness. They will also consider employment and social protection developments under the European Semester.

• 22–23 October - Informal meeting of EU trade ministers, Dublin: Ministers will meet under the Irish Presidency to discuss trade-policy priorities. The discussions are relevant to Europe's external competitiveness and the trade environment facing export-oriented CEE economies.

• 22 October - First SFDR trilogue expected: The European Parliament, Council and Commission are expected to begin interinstitutional negotiations on the review of the Sustainable Finance Disclosure Regulation (SFDR). Discussions will focus on the proposed sustainability product categories, eligibility thresholds, fossil-fuel exclusions and the treatment of sovereign debt, among other things.

What brings Central and Eastern Europeans to the Middle East and North Africa, and how do they build their lives there? On 30 October 2026, from 10:00 to 11:30, CEE Perspective’s Conversations with Experts will explore a migration story less often told. From socialist-era exchanges to contemporary careers and business ventures, the discussion will examine the connections between these regions through the experiences of the people who move between them, including how they work, save and invest.

Drawing on the forthcoming book Central and Eastern European Mobilities to the Middle East and North Africa: Histories, Networks, and Migrant Experiences, we will welcome its editor, Professor Katarzyna Górak-Sosnowska, alongside co-authors Egdūnas Račius, Hanna Smaliichuk and Fabio Coriolano. Fellow co-author Cristina Procházková Ilinitchi will moderate the conversation, examining how historical ties and personal choices shape migration and its economic dimensions. Join us online to hear their findings and put your questions to the authors.

Register here: https://ceeperspective.eu/events/conversations-with-experts-no2

• PEPP review attracts extensive parliamentary amendments: ECON members have tabled almost 350 amendments to the draft report on the Pan-European Personal Pension Product. The discussions will shape efforts to simplify the PEPP, improve its attractiveness to savers and ensure that the framework complements national pension systems.

• EU securities settlement rules prepare for T+1: New CSDR-related settlement-discipline measures, published on 14 October, support preparations for the EU's transition to next-day securities settlement on 11 October 2027. The changes aim to improve settlement efficiency and strengthen operational processes ahead of the shorter cycle.

• ESMA updates guidance on delayed disclosure of inside information: ESMA has finalised revised guidelines under the Market Abuse Regulation (MAR), clarifying the circumstances in which issuers may legitimately delay disclosing inside information. The updated guidance reflects recent changes to the EU framework and aims to provide greater legal certainty for listed companies, including those operating in smaller capital markets.

• EBA classifies USDC as the EU's first significant e-money token: The classification under MiCA, announced on 14 October, will bring USDC under additional direct EBA supervision from 12 November 2026, covering areas including own funds, reserve assets, liquidity and recovery and redemption plans.

• FSB publishes sound practices for financial-sector AI: The Financial Stability Board has published 12 sound practices addressing the governance and oversight of artificial intelligence in financial services, including model and data risks, human oversight, cybersecurity and third-party dependencies. The recommendations reflect growing attention to the operational and financial-stability implications of AI adoption.

• ESMA highlights differences in enforcement across the EEA: Its 2025 sanctions report, published on 15 October, records more than 950 administrative sanctions and measures, with fines totalling almost €82 million. Enforcement activity remained concentrated in a limited number of jurisdictions, underlining the importance of supervisory convergence.