Institut Veblen / Veblen Institute

Using Regulated Savings to finance climate adaptation : the case of French Livret A

Wojtek Kalinowski — 2026-10-01T14:30:35Z

In a new study (available only in French), the Veblen Institute examines the government's proposal to raise the ceiling on the Livret A savings account in order to fund its climate adaptation plan.

In early October, the Minister for Ecological Transition, Monique Barbut, is due to present an action plan to accelerate climate adaptation and is considering mobilising regulated savings by raising the ceiling on the Livret A savings account from 23,000 to 30,000 euros, which would, in theory, enable up to 10 billion euros to be raised each year.

Funding for the climate adaptation plan can draw on Livret A and LDDS savings accounts, but raising the ceiling will not be enough to mobilise the additional 10 billion euros mentioned. We must also address the issue of the low appeal of these savings accounts under current conditions, as illustrated by the outflow observed since autumn 2025. This outflow is specific to regulated savings, as non-regulated bank savings accounts have seen their outstanding balances increase over the same period.

To address this issue, this note sets out and discusses four possible options:

– Making the Livret A savings account more attractive. Raising interest rates would be counterproductive, as it would make loans to local authorities, which are indexed to the Livret A rate, more expensive. Preferential treatment under inheritance law or a public fundraising campaign along the lines of the "grands emprunts" are possible options, but these are merely complementary or long-term solutions.

– Increase taxation on other savings products, particularly life insurance. Aligning the tax treatment of life insurance with that of other investments (18.6%) would generate revenue of only around one billion euros. Reaching 10 billion would require an overall rate of close to 24% with a risk of capital flight and strong political resistance. This is not a realistic option in the short term.

– Increase the proportion of funds collected that are managed centrally. Increasing the proportion managed by the "Caisse des Dépôts et Consignations" from 60% to 61.7% would generate more than 10 billion euros for targeted jobs.
– Strengthen the conditions attached to decentralised management. As regulated savings benefit from public guarantees, access to these funds should be subject to more specific conditions: a clear classification of adaptation investments, annual loan volumes by category, and greater transparency regarding the allocation of loans.

Recommendation:

The quickest and least costly solution is to increase the proportion of centralised savings managed directly by the Caisse des Dépôts et des Consignations (CDC). Even a modest increase in the centralised share from 60% to 61.5% would redirect nearly 10 billion towards a targeted allocation, channelled directly towards public adaptation objectives. It is important to avoid negative effects on the balance sheets of the banks that currently manage 40 per cent of the funds collected; to this end, the increase should be phased in gradually and apply only to incoming funds, until the new allocation formula is reached.

Analysis of the JRC report on pesticide mirror measures - Key findings and advocacy implications

Mathilde Dupré & Stéphanie Kpenou — 2026-10-01T14:10:46Z

This summer, the European Commission's Joint Research Centre (JRC) published a study on the proposal to ban residues of some of the most dangerous pesticides in imported products, a measure currently discussed as part of the “food and feed” omnibus regulation. Several press articles noted that lowering maximum residue levels (MRLs) to the limit of quantification (LOQ) for certain substances banned in the EU would significantly raise the prices of certain products, specifically, a 332% increase in the price of coffee.

However, that is not what the JRC report says. That is why the Veblen Institute - together with CNCD-11.11.11, Humundi, Slow Food, and the FNH - is publishing an analysis of the JRC report on mirror measures on pesticides.

The JRC report represents a considerable and meticulous body of work. However, it focuses strictly on economic feasibility, commercial impacts, prices, and competitiveness associated with tightening import rules, while setting aside environmental and public health factors. Mirror measures should not be reduced to a mere instrument of agricultural protection or competitiveness: their environmental and public-health objectives - which fall outside the scope of the JRC's economic assessment - must be brought back to the centre of the debate. All the more so since, under WTO law, only environmental and public-health grounds can be invoked as justification — concerns about a level playing field in production conditions are not accepted.

Our analysis examines and challenges some assumptions and findings of the JRC report to provide evidence and arguments in favour of adopting more ambitious import requirements.

Main messages :

The study covers 18 active substances classified among the most hazardous under the EU criteria used in the Food and Feed Omnibus proposal, and the impact of MRLs set at the limit of quantification. It therefore assesses the least ambitious demand level, and it does not examine the effects of the broader measure proposed in the latest compromise.

The assumption of an abrupt halt in exports to the EU, resulting in a major inflationary economic shock—as modelled in the JRC's first scenario (S1)—is not only unrealistic: legitimising excessively high impact assumptions (S1 and S2) also undermines the prospects for more ambitious policy action.

S1 should not be used as a central forecast, but only as an upper bound. For country–commodity pairs involving a targeted substance with an EU MRL above the LOQ and evidence of authorisation or residue detection, it applies the shock to the entire trade flow, without scaling exposure to actual use or detection rates. It also assumes exporters do not adapt at all, which is unrealistic given historical examples (chlorpyrifos (2020), tricyclazole in rice exported from India and Pakistan (2018), or the neonicotinoids clothianidin and thiamethoxam (2026)).

The assumptions underpinning S3—which produces a limited inflationary impact—appear more relevant than those used in S2 and more consistent with the initial request to assess the effects of lowering MRLs to the limit of quantification for a small list of substances. S2 appears to overestimate both the share of trade flows potentially affected and the associated adaptation costs.

The significant impacts on the European livestock sector are not a robust finding. They occur mainly under S1, while becoming negligible in the two scenarios that allow exporters to adapt.

Additional historical case studies documenting how exporters have adapted, including potential spillover effects, would help provide a stronger evidence base on adaptation in exporting countries.

Imported Emissions: The Missing Link in Climate Policy

Mathilde Dupré & Stéphanie Kpenou — 2026-09-29T12:00:00Z

In a context of globalised trade, states' climate action suffers from a major blind spot: it ignores imported emissions, i.e. the greenhouse gas emissions that a country's final consumption generates in third countries (1). With its third national low-carbon strategy, France has become the first state to adopt an indicative target for reducing its carbon footprint — and therefore its imported emissions. Discussions are under way with other European countries to invite the EU to adopt an equivalent target. In a new paper, the Veblen Institute takes stock of the issue and puts forward recommendations for integrating this indicator into European climate objectives.

More than 20% of greenhouse gas (GHG) emissions are currently linked to international trade, and since 1995 these emissions have been growing faster than global emissions themselves. Yet under the Paris Agreement, countries' commitments rest exclusively on territorial emissions. To date, the sum of current commitments falls short of the challenge. The warming trajectory that would result from countries meeting their current climate commitments is estimated at between 2.3°C and 2.5°C by 2100, according to the United Nations Environment Programme (UNEP) (2).

Accounting for imported emissions is necessary to make the role of consumption visible and to hold net-importing countries accountable for their greenhouse gas emissions.

Tracking this indicator should help prevent "carbon leakage." This phenomenon occurs when a country reduces its territorial emissions while increasing its imported emissions, thereby shifting the burden of mitigation efforts onto its trading partners.
Accounting for imported emissions would help highlight the interdependencies between countries and coordinate the actions needed to decarbonise international value chains.
Accounting for and reducing imported emissions is also a matter of justice for producing countries, which directly bear the consequences of other countries' consumption.

Imported emissions need to be better measured and progressively integrated into climate objectives. In this context, a precondition for any progress is to measure these imported emissions by improving the way emissions from land use, land-use change and forestry (LULUCF) are accounted for, as well as emissions linked to digital technology and data centres.

[Key 2023 data]

This month the European Climate Foundation launched the [Traded Emissions Tracker→https://emissions.netzerotrade.org/] to integrate climate impacts in third countries into domestic and international policymaking. Based mainly on Eurostat's FIGARO data (excluding LULUCF), this tool covers the 2010–2023 period and maps 45 countries (accounting for nearly 75% of global emissions) across 64 economic sectors.

Global level

Global GHG emissions: 51,831.53 MtCO₂e
Traded emissions: 11,249.25 MtCO₂e (i.e. 21.7% of global emissions)
More than a fifth of global emissions are thus generated by countries for other countries' final consumption
Leading importers: China (15%); United States (15%); EU (13%); India (6%); Others (51%)
Leading exporters: China (27%); Russia (7%); EU (6%); United States (6%); Others (54%)

European Union

Territorial emissions: 3,341.56 MtCO₂e (4th rank)
Imported emissions: 1,410.15 MtCO₂e (3rd rank) (i.e. 42% of EU territorial emissions)
Carbon footprint: 4,048.01 (4th rank) (21% higher than EU territorial emissions)

Main sectors of dependence on imported emissions
Energy production (377.93 Mt CO₂)
Mining and fossil fuels (344.8 Mt CO₂)
Agriculture and livestock (139.19 Mt CO₂)

Main exporters of emissions
China (370.08 Mt CO₂)
USA (95.26 Mt CO₂)
Russia (88 Mt CO₂)

France

Territorial emissions: 408.23 MtCO₂e (17th rank)
Imported emissions: 275.02 MtCO₂e (8th rank) (i.e. 67.36% of territorial emissions)
Carbon footprint: 553.70 MtCO₂e (16th rank) (35% higher than territorial emissions)

Main sectors of dependence on imported emissions
Energy production (63.25 Mt CO₂)
Mining and fossil fuels (53.39 Mt CO₂)
Agriculture and livestock (33.08 Mt CO₂)

Main exporters of emissions
China (48.2 Mt CO₂)
Germany (15.13 Mt CO₂)
United States (14.99 Mt CO₂)

Trends since the Paris Agreement:

Between 2015 and 2023, the EU's territorial emissions fell by 2.32% per year, while imported emissions kept rising by 1.41% per year over the same period.
French territorial emissions fell by 2.25% per year, while imported emissions declined by only 0.42% per year — a pace more than five times slower.

France leading the way. The third national low-carbon strategy (SNBC3), adopted in July 2026, sets a carbon footprint reduction target, making France the first country in the world to set such a quantified target (3). The carbon footprint must be reduced by 38% to 43% by 2030 (i.e. between 426 and 464 Mt) and by 71% to 79% by 2050 (i.e. between 160 and 215 Mt) relative to 2010 (749 Mt), bringing the average footprint down to between 2.3 and 3.1 tCO₂e per capita (4). That said, the footprint reduction target is not binding, only indicative. The SNBC's targets imply reducing French imported emissions by 3.1% to 5.3% per year (5).

For both institutional and economic reasons, however, the potential of isolated action by a single member state in this area remains limited. The European level appears more relevant for mobilising all possible levers. All the more so as the EU already has initial regulatory instruments in place, such as the CBAM, the regulation on imported deforestation, the ecodesign regulation, and initiatives aimed at better regulating value chains (notably the corporate sustainability due diligence directive).

But the sometimes chaotic development of these European tools so far seems to have been designed more to avoid exposing European producers to environmentally less-compliant imports than to genuinely reduce the carbon footprint of European consumption — an objective that remains a major blind spot at European level.

France must take the lead in pushing for changes to the European framework in order to:

Track the trend in imported emissions (create a harmonised, regular EU-wide monitoring system for imported emissions)
Set targets for reducing imported emissions (complement territorial GHG reduction targets with a European trajectory on imported emissions).
Other member states also already account for their imported emissions or carbon footprint and could become allies in securing the definition of an EU-wide target.

Recommendations:

Encourage the adoption of carbon footprint or imported emissions reduction targets at European and international level, to complement the territorial approach. At European level, this objective should be integrated into the revision of the Energy Union and Climate Action governance framework — which underpins the National Energy and Climate Plans (NECPs) — expected in Q4 2026.
Unify and improve the carbon footprint calculation methodology: in the longer term, the challenge will also be to properly account for LULUCF-related emissions and emissions linked to digital technology and data centres.
Speed up data publication for the EU and its member states (currently published with longer delays than territorial emissions). Properly reallocating, as planned for 2027, emissions from electricity, gas and steam production (currently grouped into a single "Energy production" sector) to the consuming economic sectors would provide a more accurate picture of each sector's carbon intensity. Note that these publication delays for imported emissions, together with the failure to break down the energy production sector, risk leaving the EU and its member states ill-equipped to define, in time, the sustainability rules needed to address the growing challenge of imported emissions linked to digital technology and artificial intelligence.

Notes to editors
(1) Imported emissions should be distinguished from a country's carbon footprint, which covers all emissions associated with a country's consumption, wherever they were emitted (domestic territory or third countries).
(2) UNEP, Emissions Gap Report 2025: Off Target. Continued collective inaction puts global temperature goal at risk, November 2025. Current policies alone would put warming at 2.8°C.
(3) France's third [National Low-Carbon Strategy→https://www.ecologie.gouv.fr/strate...], July 2026.
(4) The range reflects the influence of decarbonisation in the rest of the world, under global 1.5°C to 2°C scenarios.
(5) Nicolas Riedinger, [The carbon footprint: reconciling climate and sovereignty→https://www.strategie-plan.gouv.fr/...], Point de vue, Haut-Commissariat à la stratégie et au plan, September 2026.

France: a major player in the global investment arbitration industry

Mathilde Dupré — 2026-09-22T07:39:31Z

In a new study (available only in French, the Veblen Institute highlights France's position within the investment arbitration industry.

Paris has become one of the world's leading centres for investment arbitration, a controversial mechanism that grants international investors the right to sue the host states of their investments in order to secure potentially colossal financial compensation. This right may be exercised when governments adopt new regulations that are likely to affect their investments or their expected profits.

Based on an analysis of known investment arbitration cases and the key players in the sector, the study shows that France occupies a strategic position within this industry.

Paris, one of the world's arbitration capitals

The arbitration industry is well established in France and actively promotes its activities, particularly by highlighting the economic benefits and international influence it believes it generates for the country According to a 2025 study by FTI Consulting, the Paris market for international arbitration (commercial and investment) is worth nearly €775 million a year and supports several thousand jobs, mainly within specialist law firms, expert firms, arbitration institutions and third-party funders.

France is pursuing a strategy aimed at enhancing its appeal as an international arbitration centre. Already recognised as such thanks to the presence of the headquarters of the International Court of Arbitration of the International Chamber of Commerce (ICC), Paris is consolidating this position with the forthcoming opening of a European office of the International Centre for Settlement of Investment Disputes (ICSID). This development also forms part of the ongoing reform of French arbitration law, which aims to modernise and further enhance the attractiveness of the national legal framework, which is already highly favourable to arbitration.

All these factors combine to make Paris one of the world's leading centres for arbitration, including in the field of Investor-State Dispute Settlement (ISDS).

With regard to ISDS, the study reveals that:

– France ranks third in the world, both in terms of the number of arbitrators involved in disputes and the total number of cases handled by these arbitrators.
– In total, 54 French arbitrators have taken part in 405 known proceedings.
– The vast majority of French arbitrators are appointed by the respondent States.
– Among the 395 cases recorded involving at least one French arbitrator, 98 different States were respondents, demonstrating the presence of French arbitrators in disputes spanning all the major regions of the world.
– Latin America is the region most frequently involved in disputes in which French arbitrators are involved, followed by the European Union in second place. These two regions account for more than half of the disputes.
– There is a certain concentration of disputes relating to the energy sector and the extractive industries.
– French arbitrators are more frequently associated with decisions favourable to states. Cases involving at least one French arbitrator are decided in favour of the state in 61.8% of cases, compared with 51.8% when no French arbitrator sits on the tribunal. This trend is particularly pronounced when the French arbitrator chairs the tribunal (66.1% of decisions in favour of states) and when the French arbitrator is appointed by the claimant investor (61.1%).

This context helps explain the persistent reluctance of successive French governments to give up investment arbitration, despite growing concerns about the restrictions it can impose on states' regulatory powers nd the financial costs that arbitration proceedings and their unfavourable outcomes can entail for them (1). However, the experience gained by French arbitrators acting as state respondents in ISDS disputes should provide a basis for much more far-reaching reforms of this investment protection regime.

This is illustrated by the remarks made by Alain Pellet, a French arbitrator (2), at the 11th Annual Conference on Investment Treaties at the OECD on 30 March 2026:

“The settlement of disputes between states is not perfect, but it is less imperfect than the settlement of disputes between investors and states. The current circumstances are truly conducive to making a genuine effort to improve the settlement of disputes between states. We are at a turning point where it is reasonable to think that we can try to combine the proposals. This is truly an opportunity to try to move away from this obsession with ISDS, which I find rather dreadful. There are many other ways to protect investments and attract investment than to place one's trust in this limited form of dispute settlement.”

The study thus highlights France's central role in the investment arbitration industry, both as an arbitration centre and through the influence exerted by its arbitrators in ISDS proceedings. It therefore emphasises France's particular responsibility in the debate on the future development of this regime.

Our recommendations:

Ensure transparency regarding cases and the financial sums involved: make it compulsory for arbitral institutions to publish details of all RDIE proceedings, the sums claimed and those ultimately awarded.
Stop the expansion of investment arbitration: France and the EU should refrain from including investment protection provisions featuring an ISDS mechanism or the investment court system(3) in new trade and/or investment agreements.
Phasing out investment arbitration
● Systematic termination of existing bilateral investment treaties (BITs). In particular, the European Commission should call on EU Member States to put an end to the old BITs, which are incompatible with European law. This incompatibility is the subject of an infringement complaint (4) brought by several civil society organisations against four Member States (France, Germany, Sweden and Austria).
● At the very least, France and the EU should undertake a review of the existing stock of treaties to ensure they meet the key requirements set out by the European Parliament in 2022 (5)

Notes:
(1) This position was particularly evident during the trade negotiations between the European Union and Canada. Whilst the European Commission was considering abandoning plans to include a chapter on investment protection in the trade negotiations with Canada, it was France which, in 2015 and with Germany's support, proposed a procedural reform of the mechanism in order to retain it.
(2) Alain Pellet is Professor emeritus at the University of Paris Nanterre, former Chair of the United Nations International Law Commission, appointed to the ICSID List of Arbitrators by the Chair of the Administrative Council (2011–2017) and to the List of Arbitrators under Annex VII of the United Nations Convention on the Law of the Sea (since 2015)
(3) The EU has recently concluded several agreements containing chapters on investment protection, such as the treaties with Canada, Singapore, Vietnam and Chile, which are awaiting ratification by the Member States, as well as the EU–Mexico Agreement, which is awaiting ratification at EU level
(4) About the complaint
(5) European Parliament, resolution of 23 June 2022 on the future of the EU's international investment policy (2021/2176(INI))

Financing Europe's strategic objectives

Wojtek Kalinowski — 2026-04-30T09:52:00Z

Insufficient investment in key policy areas impedes the pursuit of EU's objectives and weakens Europe's competitiveness in global markets. Trying to address this problem, the Commission launched in 2025 the Savings and Investment Union as a central piece of its Competitiveness Compass and hoping to channel more credit and savings into productive investments.

But the SIU is not designed to address the underlying reasons for weak investment in areas where financial flows are misaligned with strategic priorities. The only additional EU policy tool proposed for steering financial flows towards political objectives is “blending” private and public funding through the InvestEU fund and the future Competitive Fund. But closing the investment gap will require complementary measures in financial regulation and monetary policy.

This policy brief is a part of the "New approaches in transition finance" project

KEY MESSAGES

• Closing the gap requires steering tools, not only scaling tools. EU's investment shortfall is not primarily a problem of insufficient finance, but of finance that is systematically misaligned with strategic priorities. Many of investments which are highly relevant to EU's policy objectives present risk-return profiles that do not match private investors' expectations.
• The SIUs drive for stronger market integration as about scaling; it promotes the common European market but does little to steer finance towards these investments.
• The same goes for the revival of securitization, a central piece of the SIU. The additional investments promised through banks balance sheet are theoretical and there's no guarantee that they will concern investments of relevance for the EU's policies. In addition, securitization might create new financial risks.
• The SIU missed the opportunity to opt for green securitization with strong conditionalities.
• Measures to improve access to venture capital are important to scale up technological innovation, but these segments do not reflect the overall financing needs of the economy.
• Financing strategic objectives relies therefore on public subsidies and blended finance instruments.
• Complementary measures are necessary and could be deployed in the fields of financial regulation, monetary policy and macroeconomic coordination.

Download "Financing Europe's strategic objectives"

European ISDS Scorecard: a ranking of the harmful effects of 30 countries' investment treaties

Mathilde Dupré — 2026-04-21T22:30:00Z

France ranked among the most active European countries in developing and maintaining the investor–state dispute settlement (ISDS) mechanism.

France ranks as the fourth most active country in Europe in supporting the international investment arbitration regime, according to a new study (1) published by a coalition of eight European organisations, including the Veblen Institute, Powershift and CAN Europe (2). These findings are released on the eve of the first International Conference on Transitioning Away from Fossil Fuels, to be held from 24 to 29 April in Colombia, during which the investor–state dispute settlement (ISDS) system will be examined as a major obstacle to the defossilisation of our economies.

Arbitration tribunals, known as investor–state dispute settlement (ISDS) mechanisms, are provisions embedded in many trade and investment agreements. They allow investors (multinational corporations or individuals) to sue governments before private tribunals outside domestic legal systems over public interest policies — such as environmental protection or public health regulation — that they claim harm their profits, with compensation awards often reaching millions or even billions of euros.

The report entitled “Investment Arbitration Index: A Comparative Analysis of the Harmful Effects of Treaties Across 30 European Countries”, published today alongside an interactive “scoreboard”, ranks 30 European countries (3) to measure the scale of their investment treaty networks, their actual use by investors, and their concrete impacts. The index is based on ten indicators, including the number of agreements signed with ISDS provisions, their use in sensitive sectors such as fossil fuels, and the amounts of compensation claimed and awarded.

The report highlights Europe's pivotal role in the global ISDS architecture and underscores the responsibility of a small group of countries — the United Kingdom, the Netherlands, Germany, France and Switzerland — which account for a significant share of the treaties, disputes and climate risks generated by this opaque system.

The ranking reveals that:

The United Kingdom ranks first among countries responsible for the development and maintenance of ISDS; British investors are particularly active in ISDS proceedings in the mining and fossil fuel sectors.
The Netherlands follows closely behind; Dutch investors (often using shell companies with no substantial economic activity) have initiated more ISDS proceedings than those from any other European country.
France is characterised by treaties covering a large volume of investments linked to future greenhouse gas emissions and containing very long survival clauses. This configuration may constitute a structural obstacle to the adoption of ambitious energy transition policies.
Ireland is the only country with no bilateral investment treaties with other states (although this may soon change if EU trade agreements containing ISDS provisions enter into force) (4), and Norway has already terminated half of its relatively small number of treaties, demonstrating that European countries can choose alternative paths.

The report makes several recommendations:

That European governments stop signing new agreements containing investment protection chapters with ISDS or an Investment Court System mechanism. (4)
That they begin systematically terminating existing treaties. For treaties containing “sunset clauses” — which allow provisions to remain in force for a period often ranging from 10 to 20 years after termination — countries should pursue “coordinated withdrawals” to neutralise them.
That they cooperate with other countries, including outside Europe, to promote a broader exit from the ISDS system.

Examples of cases

The consequences of treaty networks, rooted in post-colonial economic relationships, are felt particularly strongly in countries of the Global South, which are the target of the majority of ISDS claims. France has been the home state of investors in 69 cases; for example, the disputes initiated in 2021 by Vinci against Peru and Chile over the economic effects of public health measures adopted during the pandemic (5).

However, European countries themselves are increasingly targeted by claims, notably in connection with environmental policies. Severgroup and KN Holdings, two investment companies controlled by sanctioned Russian oligarch A. Mordashov, initiated a proceeding against France in 2021 under the France–Russia BIT, seeking €4.5 billion in compensation following the French government's withdrawal of support for the Montagne d'Or open-pit gold mining megaproject in French Guiana. France is also being sued by Russo-Armenian businessman S. Karapetyan, whose villa on the French Riviera was seized amid allegations of money laundering and acting as a nominee for the sanctioned oil and gas giant Gazprom. This case forms part of a recent wave of claims in Europe directly challenging sanctions imposed following Russia's invasion of Ukraine (6).

Santa Marta Conference on Transitioning Away from Fossil Fuels

This publication also comes ahead of the first Conference on Transitioning Away from Fossil Fuels, to be held from 24 to 29 April in Santa Marta, Colombia — a country that has just announced its intention to withdraw from the ISDS system. ISDS is among the central items on the conference agenda, and organisations across Europe are calling on their governments to “seize this opportunity” to plan a coordinated withdrawal from the ISDS regime together with other participating countries (7).

According to Mathilde Dupré, Co-Director of the Veblen Institute:
“This report reveals the responsibility of European countries in establishing and maintaining an investment protection regime that is incompatible with states' current commitments to environmental protection and national security. The termination of intra-EU treaties and withdrawal from the Energy Charter Treaty have only partially reduced the risks that this system poses to our democracies. It is time to address the stock of older treaties held by EU Member States in order to reduce, in parallel, the risks faced by countries in the Global South.”

For Stéphanie Kpenou, Programme Officer for Trade Policy Reform at the Veblen Institute:
“France must seize the major opportunity offered by the upcoming conference in Colombia on transitioning away from fossil fuels to unlock investment protection constraints, starting with this sector.”

Notes

(1) The full report is available in English and French, and the results can be accessed online on this website.
(2) The report is jointly published by the Veblen Institute, Powershift (Germany), Global Justice Now and Trade Justice Movement (UK), TROCA (Portugal), Alliance Sud (Switzerland), CAN Europe and the European Coalition for Just Trade.
(3) The index ranks 30 European countries — the 27 EU Member States plus Norway, Switzerland and the United Kingdom — according to their structural involvement in the ISDS system. It adopts a home-state perspective, examining which treaty networks and economic actors feed the system as sources of ISDS claims. Ten indicators measure different dimensions of this involvement, ranging from the size of a country's treaty network to the number and financial scale of disputes initiated by its investors, as well as the fossil fuel assets covered by those treaties. Raw values were normalised, weighted to produce a composite score, and transformed onto a 0–10 scale, where a higher score indicates greater involvement in the ISDS system. The full methodology is available in the annex to the report.
(4) The EU has recently concluded several agreements containing investment protection chapters, including treaties with Canada, Singapore, Vietnam and Chile, pending ratification by Member States, as well as the EU–Mexico agreement pending ratification at EU level.
(5) See the UNCTAD online France page.
(6) See the report “Frozen Assets, Hot Claims: How Russian Oligarchs and Other Investors Use Investment Arbitration to Challenge Sanctions”, December 2025.
(7) See the Veblen Institute brief on the obstacles posed by investment arbitration to phasing out fossil fuels, published on the occasion of the Santa Marta Conference.

Residues of pesticides banned in the EU in imported food: ending a dangerous and unjust double standard

Mathilde Dupré & Stéphanie Kpenou — 2026-04-21T08:14:23Z

An independent legal opinion commissioned by the Veblen Institute, PAN Europe and foodwatch concludes that the EU practice of allowing residues of banned pesticides in imported food is highly questionable from an EU law perspective.

European consumers are exposed, through their food, to residues of hazardous pesticides banned on our market. Residues of at least 88 pesticide substances not approved in the EU are still allowed in imported products. Of these substances, 13% are classified as carcinogenic, mutagenic and toxic to reproduction (CMR) or as endocrine disruptors. Six PFAS pesticides, known as ‘forever chemicals', are also included among these substances (1).

Currently, when a pesticide is banned in the EU, its residue limits are not automatically lowered. Instead, the Commission sets import tolerances for pesticides used in third countries, or adopts residue limits set at international level by the Codex Alimentarius Commission.

In abriefing note, the three organisations outline the key points of the legal opinion and put forward proposals to address this shortcoming.

The findings confirm that, under the current EU legal provisions, the Commission not only has the power, but also the obligation to stop allowing these residues.

For pesticides banned on public health grounds, the practice of authorising residues of EU-banned pesticides is illegal. Import tolerances cannot apply to substances not authorised in the EU on public health grounds. Allowing such residues is contrary to the MRL Regulation, which requires the automatic deletion of MRLs following the revocation of an active substance in the EU. The EC's practice also breaches fundamental EU principles (the principle of regulatory equivalence and the principle of non-discrimination, which protects EU farmers from unfair competition from third-country producers).

The situation is more complex for pesticides banned on environmental grounds, as the MRL Regulation was originally designed to protect consumers. However, the Commission's recent measures regarding neonicotinoids show that change is possible within the current framework. A revision of the MRL Regulation to include environmental protection would strengthen future action. Furthermore, this regulation should also cover crops intended for animal feed, energy production and ornamental purposes.

The ‘omnibus' simplification package on food and feed safety proposes measures to address this situation. However, the proposal currently on the table is insufficient and largely symbolic. Under this proposal, the vast majority of banned pesticides would continue to enter the EU via food imports. It covers only a limited subset, representing around 22% of EU-banned substances (2). Furthermore, the omnibus significantly weakens the general legal framework governing pesticides and their residues. It is therefore unacceptable as it stands.

To address this long-standing shortcoming, the Omnibus Regulation must introduce a clear and binding obligation on the Commission to automatically ban residues of any pesticide not approved in the EU, regardless of the reason for the ban and for all food products. Any less stringent measure would perpetuate a system that knowingly allows harmful substances to end up on Europeans' plates and undermines the EU's own standards.

Notes
(1) List based on banned and restricted active substances included in the Prior Consent Inform (PIC) Regulation
(2) The Omnibus proposal covers active substances that are Carcinogenic, Mutagenic and Toxic for reproduction (CMR) Categories 1A/1B, Endocrine Disruptors for humans or non-target organism, Persistent Organic Pollutant (POP), Persistent, Bioaccumulative and Toxic (PBT), or very Persistent and very Bioaccumulative (vPvB). We calculated, on the basis of available data, that 20 of the 88 substances meet these criteria. While official lists exist for CMR substances and endocrine disruptors, no equivalent official list of PBT/vPvB substances has been established at EU level. This figure should therefore be treated as an estimate.

Unlocking the Investment Arbitration System to Phase Out Fossil Fuels

Mathilde Dupré & Stéphanie Kpenou — 2026-04-20T13:28:15Z

Investment arbitration is increasingly recognised as an obstacle to the implementation of ambitious climate policies by states. This issue will be on the agenda of the “First Conference on Transitioning Away from Fossil Fuels”, which will take place in Colombia from 24 to 29 April 2026 and will be co-hosted by Colombia and the Netherlands.

In this context, and as part of the consultation on the Brazilian COP Presidency Roadmap entitled “Transitioning Away from Fossil Fuels” (TAFF), the Veblen Institute has prepared this brief to put forward several concrete proposals.

Removing protection for fossil fuel investments is an essential prerequisite to ensure that taxpayers do not bear the excessive costs of the transition by compensating fossil fuel investors — often under valuation methods highly favourable to them — for public policies aimed at phasing out fossil fuels and managing stranded assets.

Such removal of protection does not prejudge the trajectory or pace of the fossil fuel phase-out, which may legitimately vary from one country to another depending on their level of development and degree of dependence on fossil fuels.

In response to the call launched by more than 200 economists and academics, Colombian President Gustavo Petro announced on 23 March his intention to withdraw his country from the investor–state dispute settlement (ISDS) system. European governments should seize the opportunity of the Santa Marta Conference to plan a coordinated exit from the current investment protection regime together with other participating countries.

Europe plays a pivotal role in the global ISDS architecture, particularly a small group of countries — the United Kingdom, the Netherlands, Germany, France and Switzerland — which account for a significant share of the treaties, disputes and climate risks generated by this system. This is what we demonstrate in our “Investment Arbitration Index: A Comparative Analysis of the Harmful Effects of Treaties Across 30 European Countries”, accompanied by an interactive “scoreboard” ranking 30 European countries according to the scale of their respective investment treaty networks, their actual use by investors, and their concrete impacts. The index is based on ten indicators, including the number of ISDS agreements signed, their use in sensitive sectors such as fossil fuels, and the amounts of compensation claimed and awarded.

Banking Regulation and Competitiveness of the EU Banking sector

Jézabel Couppey-Soubeyran & Wojtek Kalinowski — 2026-03-13T10:36:47Z

The European Commission's Call for Evidence frames the challenges facing the EU banking sector in terms of regulatory complexity, fragmentation, and burdens on competitiveness.

Our response draws on recent academic and policy research and is structured in 8 sections, each treating a specific aspect of the problem:
– The state of financial stability risks
– Links between capital requirements and competitiveness
– Sources of complexity in finance and financial regulation
– A critical assessment of the ECB's Buffer Simplification Proposal
– An alternative approach to simplification
– Relation between competitiveness of banks and the needs of the real economy
– Relation between bank competitiveness and sustainability objectives
– Financial risks linked to bank sector concentration

This response has been prepared as part of our “Money & Finance” program activities, supported by Charles-Léopold Mayer Foundation and European Climate Foundation.

Executive Summary

In our response to the European Commission's Call for Evidence on Competitiveness in the Single Banking Market, we challenge the framing that regulatory complexity and capital requirements are the primary obstacles to EU banking competitiveness. Drawing on recent research, we argue that complexity stems from financial innovation and from internal models used by banks in order to reduce effective capital requirements. A misconceived simplification agenda risks weakening financial stability without delivering the economic benefits promised. We propose simplification that eliminates redundancies, reduces regulatory arbitrage while preserving — in some areas strengthening — the prudential architecture built since 2008.

Financial stability risks remain elevated. Recent assessments by the IMF (October 2025), the ECB/ESRB (January and February 2026), and others indicate that financial stability risks remain elevated despite improved headline capital ratios. Growing interconnections between banks and non-bank financial intermediaries, stretched asset valuations, and geoeconomic fragmentation all argue for maintaining, not relaxing, prudential buffers. The Commission's assertion that “banks are well capitalised” understates both the complexity of the current risk environment and the heterogeneity hidden behind the average capitalisation level (large banks remain significantly less capitalised than smaller ones, even though they should be more so given their exposure to systemic risks).

Capital requirements do not undermine competitiveness. Our literature overview finds no evidence that capital requirements are the primary drag on bank competitiveness or lending. Better-capitalised banks tend to lend more steadily through cycles, support higher return on assets, and prove more resilient in stress episodes. The SVB failure of 2023 illustrates what regulatory rollback can produce. We propose that the debate be grounded in this independent evidence rather than in industry self-assessments.

Complexity originates in financial “innovation,” internal model discretion. Regulatory complexity has real costs, but its primary source is not excessive prudential ambition — it is the Internal Ratings-Based (IRB) approach, which allows large banks to use their own models to estimate capital requirements. This creates incentives for strategic underestimation of risk, undermines the level playing field, and generates the complexity that supervisors then struggle to manage. We propose that simplification efforts target this structural problem: replacing internal model discretion with transparent, standardised rules, rather than reducing overall capital levels.

The ECB's buffer simplification proposal would make the framework less legible and harder to activate. The ECB's December 2025 proposal to merge the countercyclical capital buffer (CCyB) and the systemic risk buffer (SyRB) into a single releasable instrument conflates two analytically distinct tools addressing cyclical and structural vulnerabilities respectively. This merger would make the framework less legible and harder to activate. We propose that buffer reform preserve the CCyB/SyRB distinction and prioritise more proactive CCyB deployment rather than instrument consolidation.

An alternative: simplify by eliminating internal model complexity. Genuine simplification without deregulation is possible. Le Quang (2025) identifies real redundancies: the LCR and NSFR could be consolidated into a single NSFR-based liquidity requirement. More substantially, replacing the risk-weighted capital ratio — dependent on manipulable internal models — with a well-calibrated simple leverage ratio would reduce complexity, improve transparency, and maintain loss-absorbing capacity. We propose these targeted reforms as a credible alternative to the deregulatory simplification currently on the table.

Bank competitiveness is not the same as economic competitiveness. We propose broadening the definition of “competitiveness” to encompass the banking system's capacity to finance long-term investment and the ecological transition, not only short-term returns.

Rolling back supervisory engagement with environmental risk is not financially neutral. We propose that the prudential framework's engagement with climate- and nature-related financial risks be maintained and strengthened.

Consolidation risks compounding systemic fragility. Conventional concentration metrics understate the true degree of concentration. We propose that any consolidation be subject to coordinated prudential and competition scrutiny with an explicit systemic risk assessment, and that structural questions about bank size and activity separation be reopened.

Frozen assets, hot claims: How sanctioned oligarchs & other investors sue over sanctions

Mathilde Dupré & Stéphanie Kpenou — 2025-12-09T00:11:36Z

After Russia's full scale invasion of Ukraine, the EU, Ukraine itself and almost 20 other countries introduced wide-ranging economic sanctions against the Russian state. The sanctions also target companies and individuals closely linked to the regime and the war effort.
These sanctions are now being challenged by Russian oligarchs and companies in private tribunals using a mechanism written into investment treaties, known as investor-state dispute settlement (ISDS). While the cases are in early stages, they are already having a severe impact on EU sanction policy and Ukrainian national security policy.

A clear example is the current standoff over the use of immobilised Russian assets. The European Commission and most EU member states want to use 90 billion euros of Russian assets held at Euroclear to provide financial support to Ukraine. But the Belgian government, where Euroclear is located, has blocked the use of the funds
due to the risk of being sued.

Our analysis reveals that 24 publicly known ISDS cases have been initiated directly challenging sanctions against Russia, out of a total of 28 sanctions- related cases and threats. The cases challenging sanctions include:

The sanctioned Russian oligarch Mikhail Fridman is suing Luxembourg for 16 billion USD for freezing his assets;
Several Russian investors are initiating claims against Belgium over the freezing of Russian-held assets at Euroclear;
Investors are suing Ukraine in two separate cases over the removal of a Russian-linked bank from Ukraine's banking sector, for a combined amount of 1.4 billion USD.

Our analysis also shows that:

Overall, known ISDS claims and threats of claims by sanctioned individuals and entities already amount to 62 billion USD. This is getting close to the 70 billion USD of military assistance the EU has provided to Ukraine since 2022. The true figure is very likely to be significantly higher as in more than half the cases no information about the amounts claimed is available.
More than half of the ongoing, sanctions-related ISDS cases are against Ukraine. The others are targeting other European countries (Belgium, France, Lithuania, Luxembourg and the UK) and Canada.
Seven ISDS cases against Ukraine's sanctions and security policies are based on investment treaties with EU member states and a further two on the Ukraine-UK investment treaty. This shows that the investment treaties that European countries maintain with Ukraine have enabled sanctioned individuals and entities to directly challenge Ukraine's national security policy.
Russian oligarch Mikhail Fridman has filed five claims against sanctions-related measures and threatened a sixth case. Three of the five cases are targeting Ukraine, of which two are based on the investment treaty that Ukraine has with Belgium and Luxembourg and the other on one with the Netherlands.

Of the 24 cases challenging sanctions, 13 have been initiated in 2025 alone, highlighting how investors are increasingly resorting to ISDS to challenge the sanctions policy of Ukraine and its supporters.

The incompatibility of EU countries' investment treaties with EU sanctions policy was previously highlighted by the European Court of Justice in 2009. In three rulings against Austria, Sweden, and Finland, it found that capital transfer clauses in the three countries' investment treaties conflict with the Council's authority to unilaterally impose sanctions on third countries. However in the years since then, the countries and other EU Member States with similar clauses in their treaties have failed to remedy the situation. They have not renegotiated their treaties to include safeguards, nor have they cancelled them.

In view of the increasing weaponisation of investment treaties to weaken the European and Ukrainian sanctions policy, it is paramount that the EU and Ukraine adopt effective measures to neutralize ISDS risks.

Recommendations
In order to reduce risks for EU and Ukrainian national security and sanction policy and to prevent the outflow of money to sanctioned entities and investors, European policy makers should immediately:

Work with the Ukrainian government on a termination treaty for all investment treaties between European countries and Ukraine, including the elimination of the sunset clauses.
Cancel the 41 investment treaties with Russia and Belarus currently in force and that pose the most immediate danger to Europe's sanctions regime.
Extend the anti-ISDS provisions of the EU's 18th sanctions package to Ukraine. These are meant to limit the ability of sanctioned investors to pursue and enforce ISDS cases, and currently apply to EU countries and Switzerland. Extending to Ukraine should reduce the risk of further use of European investment treaties to challenge Ukraine's sanctions and national security policy.
Ensure that arbitral institutions hosted by or headquartered in EU Member States fully comply with EU law and the EU sanctions packages.
Leverage the EU's diplomatic influence to persuade third countries, such as Singapore, to adopt similar regulations denying legal effects to awards in favour of sanctioned investors (as Switzerland recently did).
Intervene in the ongoing cases against Ukraine and Member States with amicus curiae submissions.
Provide full transparency about the ongoing cases challenging sanctions and the sums involved, to enable policy makers and civil society to fully assess the threat the cases are posing.

Ukrainian policy makers should consider the following steps:

Work with their European counterparts on a termination treaty for the investment treaties between the European countries and Ukraine. This should follow the model the EU countries used to cancel investment treaties between each other. The cancellation would also be necessary if Ukraine accedes to the EU, since EU countries are not allowed to maintain investment treaties with each other.
Withdraw Ukraine from the Energy Charter Treaty and add Ukraine in the EU's interpretative declaration and inter-se agreement including the neutralisation of the sunset clause.
Provide full transparency about the ongoing cases against Ukraine and the sums involved to enable policy makers and civil society to fully assess the threat the cases are posing.

The findings above shed a new light on the risks posed by the controversial ISDS system, revealing that it endangers sovereignty over policy making even on national security matters. To safeguard their policy space, policy makers should therefore:

Undertake an assessment of how other policy priorities related to national security, taxation, climate and environmental protection and other public interest areas are threatened by ISDS provisions in BITs.
Remove ISDS from all existing treaties and stop signing new treaties with any form of ISDS.