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The European Union (EU) wants crypto trading to stop being a chaotic mess. EU negotiators published a provisional agreement that marks the blocs first rules regarding tracing transfers of crypto assets, clamping down on illicit transfers and suspicious transactions.

Despite what the crypto bros will tell you, cryptocurrency is not the safest investment on the market right now. In fact, not only is it one of the most volatile places to put your money in, but its also riddled with scams. But this doesnt mean that crypto cant play a role in our economy just that it needs to be more closely regulated. At least thats what the European Union believes.

Perhaps the most important part of the legislation is something that would force crypto trading platforms to store more data about transactions. When a crypto asset is passed from one person to another, information on both the sender and the receiver would have to be stored by the trading platforms if the amount is larger than the equivalent of 1,000 euros, and companies would be forced to hand this information over to authorities investigating things like funding terrorists or money laundering. This would subject cryptocurrency transfers to the same money-laundering rules as traditional banking transfers, aligning crypto transfers with normal money transfers. The rules wont affect tokens without issuers, like bitcoin.

The European Securities and Markets Authority also announced that the new rules, known as Markets in Crypto-Assets (MiCA), will force trading platforms to warn consumers about the risk of losses associated with trading digital tokens.

This would also help protect some of the less savvy traders. When the lockdown came in, a new crowd of people went into trading, and while some people have made money with crypto, others have lost fortunes, either due to market prices, or due to scams. Many people new to trading didnt even know what they were buying they were doing copy trading or other automated trades, with little oversight.

For too long, crypto-assets have been under the radar of our law enforcement authorities, one of the lead EU lawmakers negotiating the rules, Assita Kanko, said in a statement. It will be much harder to misuse crypto-assets and innocent traders and investors will be better protected.

The decision was also fueled by concerns over consumer protection, especially as the value of bitcoin, the worlds largest cryptocurrency, has plunged more than 70% from its all-time high in a matter of months. A so-called stablecoin (a cryptocurrency where the price is designed to be pegged to a cryptocurrency) called TerraUSD imploded virtually overnight, erasing an estimated $40 billion in investor funds with no accountability.

This is just the first step in a sweeping package that aims to introduce a number of oversight measures and place some firm principles on the wild west of crypto trading. Additional measures are expected to be presented in the following weeks, but the whole package will be finished 18 months from now.

The effects of this move are expected to spill outside the continent and potentially become a global standard. Just like how the EUs data privacy policy became the norm in many other parts of the world, the new crypto regulations are expected to be influential on other continents. Smaller countries that could find it difficult to draft legislation of this magnitude may also adopt and implement the packages (with minor tweaks).

But the EU will have a hard problem harmonizing the law between different countries. While Germany, for instance, has been very proactive in requiring companies that facilitate crypto assets on behalf of clients to take special precautions and obtain a specific license, other European countries have virtually no crypto legislation.

The measure was in the work for some time, but it was also accelerated by Russias invasion of Ukraine. As the sanctions against Russia broaden, the possibility of using crypto for evading sanctions also becomes more pressing, and EU legislators want to make sure that Russia cant use crypto to keep funding its war.

Ultimately, its unsurprising that the EU wants a more conservative and responsible approach toward cryptocurrencies. The downside is that this will hamper the growth and ease of use of cryptos, but could provide a healthy, durable framework on which to ensure that cryptocurrencies finally have a positive effect in society instead of just making money for some people and losing money for others.

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The European Union wants to regulate the Wild West of crypto trading - ZME Science

Mario Draghi has agreed to stay on as a caretaker prime minister for Italy. Elections are scheduled for September. Andreas Solaro/AFP via Getty Images hide caption

Mario Draghi has agreed to stay on as a caretaker prime minister for Italy. Elections are scheduled for September.

Italian officials and voters alike are mulling over Prime Minister Mario Draghi's resignation last week and experts say it's for good reason.

Draghi was appointed to office in February 2021. For the past year and a half, Draghi has been heralded for his role in leading Italy out of a health and economic crisis. Many hoped for Draghi's guidance as Europe faces soaring inflation and Russia wages war against Ukraine.

He's been credited for restoring Italy's economy and reputation. Now, experts warn that both hang in the balance as uncertainty grows in Italy and Europe at-large.

"Mario Draghi was such a trusted pair of hands across Europe," said Christopher Way, an associate professor in government at Cornell University who specializes in European politics. "He was so respected for his competence that it's a loss no matter who replaces him."

Italy is slated to hold early elections on Sept. 25, but it will likely take several additional months before a new coalition government is formed. (Back in 2018, it took 90 days after parliamentary elections for a new government to be sworn in.) Until then, Draghi has agreed to stay in office as a temporary caretaker at President Sergio Mattarella's request.

Known as the national unity government, various parties throughout the spectrum of Italian politics joined together in response to the pandemic. For a while, the government had a rare period of stability, according to Way.

But that didn't last long with the government's term originally set to expire spring 2023. Way said party leaders began jockeying for position in advance of the election next year, which is why parliamentary infighting started.

It all came to a head this month as Draghi tried to rally support for a key relief bill, designed to help consumers and industries with soaring energy costs.

The populist 5-Star Movement refused to back the bill, raising concerns about how a new garbage incinerator for Rome may affect the environment. Then, the League, a far-right group, and Forza Italia, a center-right party, followed suit and refused to support the prime minister.

Although Draghi was still widely favored by the president and several groups in his coalition, he offered to step down in response to the turmoil. His resignation was first rejected but eventually accepted by the president after it became clear that the coalition was no longer cooperating.

"The majority of national unity that has sustained this government from its creation doesn't exist any more," Draghi wrote in a statement before submitting his resignation on Thursday.

Last summer, the European Union gave Italy billions in aid for pandemic recovery under the condition that the country would prioritize growing its economy and managing its debt.

As the former European Central Bank chief, Draghi was entrusted to handle the relief funds and put Italy's finances in order for the country and the rest of Europe's sake.

That particularly puts the European Central Bank in a difficult situation, Way said. As inflation climbs across Europe, the bank will need to raise interest rates quickly, but doing so will also hike up Italy's debt and risk the sustainability of Italy's finances.

As the third largest economy in the eurozone, both options are likely to have ripple effects in Europe and the United States.

"Potentially destabilizing the Italian economy and the market for its sovereign debt has major implications for the European Union and for the survivability of the euro," Way said.

Now, with Draghi's departure, there's growing concern of whether the next elected government will be fiscally responsible and stay committed to the economic reforms laid out by the EU.

Since Russia's invasion of Ukraine, Europe has been able to marshal a strong united front against Russia leader Vladimir Putin. But that might change depending on the results of Italy's upcoming elections, said Lucia Rubinelli, an assistant professor in political science at Yale University who has studied Italian politics.

"Draghi was definitely a leading force in Europe against Russia," Rubinelli said. "The problem with Draghi gone is that Italy and many Italian parties have for a very long time been dealing with Russia on better, friendlier terms."

Among the top coalition contenders are the League and Forza Italia, both of whom reportedly have close ties with Putin. If they were elected into the next government, Rubinelli suggests that the EU's strategies including sanctions imposed on Russia and military aid packages to Ukraine may become more complicated.

Italy will likely continue to cooperate in the EU's plans against Russia, Rubinelli adds. But the larger question is what Italy's next elected government may want from the EU in return, which could be issues like having specific sanctions lifted or freedom to enact tighter immigration policies.

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Italian PM Mario Draghi's resignation will have ripple effects in Europe - NPR

1. Introduction

As the transition to a digital society is accelerating in recent years, especially after the coronavirus outbreak, the expectations of the European Citizens for a safer digital environment are growing. There is then an urgent need to combat cybercrime. In two different articles we will address, in particular, the surging phenomenon of the ransomware attacks and how this issue is being tackled within the European Union. In this contribution we will introduce the relevant phenomenon (Chapter 2). In addition, it will be assessed what are the legislative and policy frameworks in place in the European Union for facing this issue (Chapter 3).

2. The ransomware attacks

Ransomware can be described as a type of malware (like viruses, trojans, etc.) that infect the computer systems of users and manipulates the infected system in a way, that the victim cannot (partially or fully) use it and the data stored on it. The victim usually shortly after receives a blackmail note by pop-up, pressing the victim to pay a ransom (hence the name) to regain full access to system and files 1.

The criminality resorts to different types of tactics to achieve their finalities. Ransomware attacks have the primary goal of making monetary gains by way of unlawful means. Ransomware typically encrypts target files and displays notifications, requesting payment before the data can be unlocked. Ransomware demands are usually in the form of virtual currency, such as bitcoin. This because these types of payments are difficult to be tracked2.

Ransomware attacks have certainly a global impact.

A report issued on 2021 has revealed that the frequency and the complexity of ransomware attacks increased (by more than 150% in 2020 such that ransomware can now be defined as one of the greatest threats that organizations face today regardless of the sector to which they belong 3.

The above findings speak volumes on how this issue is serious and of concern for all the world. Consequently, it does not come as a surprise that it has been clearly recognized nowadays that ransomware is a prime item in agendas for meetings on strategy among global leaders 4.

In the fight against ransomware, several challenges need to be addressed. One of the main issues results in the lack of coordination and collaboration between the agencies and the authorities all over the world. There is indeed a lack of legislation in many countries that clearly criminalises ransomware attacks5.

This problem holds true also for the European Union given that: (i) it is made of different Member States which, in some cases, have different internal law frameworks when it comes to cybersecurity and modalities to tackle the ransomware problem; (ii) the issue must be addressed also with reference to the States which are external to the European Union (in which the ransomware phenomenon flourishes).

3. How the European Union is dealing with the issue

Considering all the above, in the following chapter we will look at how the European Union is trying to face the ransomware attacks.

3.1. The European Union legislative interventions

The first step towards the creation and development of an EU cybersecurity ecosystem was the adoption of a cybersecurity strategy in 20136. This strategy identified the achievement of cyber-resilience and the development of industrial and technological resources for cybersecurity as its key objectives. As part of this strategy, the European Commission proposed the EU Network and Information Security directive 2016/1148 (NIS Directive)7.

In particular, the NIS Directive8 sets out that the EU Member States must have certain national cybersecurity capabilities and that there shall be a cooperation in the exchange of information amongst the same EU countries. Moreover, according to the NIS Directive, the EU Member States shall promote a culture of security across sectors very relevant for the EU and which rely on ICTs such as energy, transport, water, banking, financial market infrastructures, healthcare and digital infrastructure 9.

It is interesting to note that the NIS Directive limited to provide for measures by way of which the EU States shall increase their attention when it comes to cyber-attacks. On the other hand, it did not envisage a common and specific framework (for example in terms of sanctions to be applied) for tackling cyber-crimes (such as the ransomware attacks).

That is probably why in June 2017, the EU tried to reinforce its global response to the cyber-attacks (including ransomware) by establishing a Framework for a Joint EU Diplomatic Response to Malicious Cyber Activities (the so called Cyber Diplomacy Toolbox)10.

This framework basically allows the EU and its Member States (by way of an initiative to be taken by the Council) to use all necessary measures ... to prevent, discourage, deter and respond to malicious cyber activities [and thus also to the ransomware attacks] targeting the integrity and security of the EU and its member states .... In particular, the Cyber Diplomacy Toolbox gives the possibility to the Council to impose ... sanctions on persons or entities that are responsible for cyber-attacks or attempted cyber-attacks, who provide financial, technical or material support for such attacks or who are involved in other ways ... 11.

Finally, also in the attempt to reinforce the attack to the malicious cyber activities (such as the ransomware) a revised version of the NIS Directive (to be named NIS2 Directive) has been proposed by the European Commission in 2020. In particular12:

The proposed NIS2 Directive though is now still under discussion13.

3.2. The European Union policy interventions

The European Union has then dealt with the issue of the ransomware attacks also pursuing specific policies of international cooperation on this topic.

In particular, the European Union has soon realized that this problem was global and that it was thus necessary to tackle it also involving the other stakeholders.

That is why the European Union signed for example a joint EU-U.S. statement for working together in the fight against ransomware through law enforcement action, raising public awareness on how to protect networks as well as the risk of paying the criminals responsible, and to encourage those states that turn a blind eye to this crime to arrest and extradite or effectively prosecute criminals on their territory ...14.

Moreover, the EU takes part on a regular basis in international summits (together with important partners such as U.S.A., India and Australia) where it is discussed how to counter this plague on a global scale15.

4. Conclusions

As we have seen above, the current framework set by the European Union to tackle the ransomware attacks is rather complex and worthy to be carefully assessed.

In a subsequent article to be published soon on Lexology, reference will then be made to the main actors in charge of dealing with such phenomenon in Europe and to the strengths and weaknesses of the current EU system of defence against this invasive form of cyber-criminality.

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The European Union's efforts to tackle the phenomenon of ransomware attacks (Part I) - Lexology

GORZOW WIELKOPOLSKI, Poland, July 25 (Reuters) - Construction sites, factory assembly lines and warehouses across central Europe are scrambling to fill vacancies after tens of thousands of Ukrainian men left their blue-collar jobs to return home after Russia invaded their country.

Ukrainian workers had flocked to central Europe in the past decade - drawn by higher wages and aided by an easing of visa requirements - filling jobs that weren't highly paid enough for local workers in construction, the automotive sector, and heavy industry.

Many of these workers have returned home to help the war effort since Russia invaded on February 24, abruptly worsening labour shortages in some of Europe's most industrialized economies.

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Reuters spoke to 14 company executives, recruiters, industry bodies and economists in Poland and the Czech Republic who said the departure of Ukrainian workers was leading to rising costs and delays in manufacturing orders and construction work.

Before the Russian invasion, Ukrainians were the largest group of foreign workers in central Europe. Poland and the Czech Republic hosted Ukrainian workforces of around 600,000 and more than 200,000 respectively, according to industry trade groups.

The Employers of Poland trade group, which represents 19,000 companies, estimates that around 150,000 Ukrainian workers, mainly men, have left Poland since the start of the war.

Wieslaw Nowak, chief executive of Polish tram and railway line builder ZUE Group, said one of its sub-contractors recently failed to complete work related to laying tracks because nearly all of its 30 Ukrainian workers had left.

"Many companies are looking for employees on a massive scale at various construction sites due to large outflows," he told Reuters.

"It certainly affects the cost and pace of work because if someone loses several dozen employees at the same time rebuilding a team takes far more than a matter of a few days."

While the European Central Bank said in June an influx of Ukrainian refugees was expected to ease a euro zone labour shortage, the opposite seems to be happening in Europe's industrialised economies outside the currency bloc.

Hundreds of thousands of Ukrainian refugees, mainly women and children, who arrived in the region are not an easy fit for many of the vacant positions. Often the jobs are in physically demanding sectors such as construction, manufacturing or foundries where legal limits apply on how much female workers are allowed to lift.

From training female refugees to operate forklift trucks to recruiting new workers in Asia, companies are scrambling to find innovative ways to plug the gaps in their workforces, the company executives told Reuters.

But for many firms struggling to recover from the economic impact of the COVID pandemic, and now facing sharp rises in energy costs and inflation following the war, the sudden scarcity of labour poses a severe challenge.

"The loss of Ukrainian workers has deepened the problems companies are facing," Radek Spicar, vice president of the Czech Federation of Industry, told Reuters. "Companies say they can't cover all the demand from business partners: they deliver with delays and pay penalties."

With industrial production contributing to 30% of GDP, the Czech Republic ranks as the EU's most industrialised nation. Poland follows closely behind at 25%.

Before the Russian invasion, Germany-based recruiter Hofmann Personal had more than 1,000 Ukrainian candidates due to arrive in the Czech Republic between March and June, mostly for jobs in the automotive, logistics and manufacturing sectors.

The companies expecting those workers are now struggling to fill those openings, said Gabriela Hrbackova, Hofmann Personal's managing director in the Czech Republic. The country has the lowest unemployment rate in the European Union of just 3.1%.

"If this cannot be resolved quickly and opportunities for recruiting foreign candidates are not strengthened, it will have major implications, especially for manufacturing companies," Hrbackova told Reuters.

"Companies lack hundreds of employees for positions of production operators, qualified manufacturing positions such as welders, (machine) operators, metal workers and forklift drivers."

Executives and trade groups said the impact of Ukrainian workers' departures is being felt particularly hard in emerging Europe because the region is less automated than more developed European Union economies, such as regional heavyweight Germany.

For Scanfil (SCANFL.HE) -- a Finnish company specialised in electronics manufacturing, assembly and production outsourcing -- the swift loss of workers from the labour market in Poland, where it has operations, reinforced plans to boost automation.

"Automation is possible in some positions but not everywhere," said Magdalena Szweda, human resources manager of Scanfil Poland in Myslowice. "We still have a need in many workplaces for human hands so it doesn't resolve the problem."

The chief economist at BNP Paribas Bank Polska, Michal Dybula, said it was clear the loss of Ukrainian workers would harm the Polish economy - the sixth-largest in the European Union - at least in the short term, based on both economic data and conversations with local businesses.

However, it was too soon to quantify the scale of the impact, he said.

Petr Skocek, director of German automotive supplier Brose Group's facility in the Czech city Ostrava, near the Polish border, said the past inflow of Ukrainian workers had been a boon to businesses because of their qualifications, work ethic and similar culture.

"This channel has now stopped," he said.

The staffing issue comes on top of supply chain problems for manufacturers, who face soaring costs for energy and materials due to the war and lingering disruptions to supply chains from the pandemic.

The producer price index - a measure of inflation for businesses - hit nearly 25.6% in June in Poland and 28.5% in June in the Czech Republic.

Some companies are bumping up salary offers to attract replacement workers, seeking to lure local workers and stave off competing firms for the limited number of Ukrainians.

"We're searching for Ukrainian workers on the market, offering more money," said Maciej Jeczmyk, chief executive of Poland-based manufacturer InBet, which makes prefabricated materials for construction. "We are adapting almost every week."

To cope with shortages, Polish staffing firm Gremi Personal said their client companies had shifted men to more physically demanding jobs and hired Ukrainian refugee women to replace them.

"So, for example, a man would move from the production line to the logistics department where they have to carry heavy things that have a legal limit for women," the firm's deputy director Damian Guzman told Reuters.

The shortage has also forced companies to rethink how they work and look further afield to countries like Mongolia and the Philippines where language, travel and visa issues makes it difficult to quickly fill vacancies.

"The problem is that the number of workers brought from these other countries is not high enough to fill vacancies," said Marcos Segador Arrebola, the chief executive of recruiter GI Group Poland.

He said the number of Ukrainian workers in emerging Europe's largest economy increased 38-fold over the past 13 years.

Companies such as construction firm Inpro in Poland are also turning to pre-fabricated elements to keep construction projects on time. Others are extending working hours and training women for positions traditionally occupied by men, such as operating fork lifts.

Wojciech Ratajczyk, chief executive of staffing firm Trenkwalder Poland, said Poland had open vacancies for 50,000 logistics workers, most of them forklift drivers.

He said that more than 600 women answered an advert sent to 2,000 refugees about learning how to operate forklifts. A few dozen recently started a 4-week course organised in conjunction with companies.

One participant is Olha Voroviy, a former sales manager who found work in automotive supplier Faurecia's Polish warehouse after fleeing her home in Ukraine.

"It is a hard work ... but I need to work and make money and there was no other job in Gorzow," Voroviy told Reuters during a break in a certification course that will pave the way to a higher paying job in the warehouse.

"In Ukraine, I was working with my mind and here in Poland Im working physically."

(This story corrects to make clear open vacancies are in Poland not company in comments from Trenkwalder Poland in paragraph 37)

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Writing by Michael Kahn, Reporting by Michael Kahn in Prague and Anna Koper in Warsaw, Additional reporting by Andrey Sychev, Hedy Beloucif, Malgorzata Wojtunik in Gdansk; Editing by Alison Williams

Our Standards: The Thomson Reuters Trust Principles.

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Exodus of Ukrainian workers hits Europe's emerging economies - Reuters

EU treaty reforms have progressively increased the power of the European Parliament by making it a co-legislator with national governments in many important policy areas. But have these reforms had a positive impact on the EUs democratic legitimacy? Drawing on a new study, Miriam Sorace demonstrates that decisions made jointly between national governments and the European Parliament tend to match public opinion more closely than those made by governments alone. This suggests that further empowering the Parliament and reducing the use of unanimous decision-making would help tackle the EUs democratic deficit.

Scholars disagree over the effect that territorial weights have on the democratic quality of a political system. Some argue that fully democratic legislatures need to vote simply by ideological majorities in most policy domains i.e. those that affect all citizens as individuals rather than territories and/or do not generate permanent minorities. Others argue that for large, decentralised political systems, territorial vetoes are always required, and do not see a plausible link between embedding territoriality in legislative institutions and democratic deficits.

In a recent study, I have looked at whether territorial vetoes in decision-making make it difficult for a political system to deliver the policies that citizens want by looking at the case of the European Union. The EU is a heavily territorial political system, which is often challenged on democratic deficit grounds, and which is currently undergoing constitutional reflection, as the Conference on the Future of Europe process attests. Examining the EU is particularly salient, since many policy challenges are, in our globalised world, supranational in nature; and since the EU is taken as a model by many other global governance institutions.

In the EU, some important policy issues are still exclusively decided by the Council of Ministers (with one minister from the executive branch of each member state) via unanimity. The European Parliament has been progressively empowered, most notably through the codecision reform, which gives it the same veto powers as the Council, effectively making it a co-legislator. The codecision reform has, however, been applied in stages: different policy areas were assigned codecision in different treaty reform rounds, and often only subsets of the policy area were assigned codecision.

I leverage this staggered application of codecision a reform that weakened the weight of member states in EU law-making by looking at the case of EU employment and social policy. In EU employment and social policy, codecision was only applied in 1999 with the Amsterdam Treaty, and only to a subset of such policies: those that were assigned the cooperation procedure before 1999. Whilst the cooperation procedure granted slightly more powers to the European Parliament, its role was still largely consultative, and the territorial chamber (the Council of Ministers) retained its nearly absolute veto power.

I thus compare EU employment and social policies that were decided under the most territorial procedure (consultation) to EU employment and social policies that were decided by cooperation before 1999 and by codecision after 1999. This setup allows for a difference-in-differences causal analysis and means we can control for time-varying characteristics that might impact on EU policy and public opinion, such as the role of economic downturns, as well as characteristics specific to each sub-domain of EU employment policy (for example the salience of policy proposals).

The texts of EU employment and social policies were analysed by samples of online human coders and were placed on the pro-worker or pro-business side on the basis of a thoroughly piloted and validated text analysis codebook. Each EU policy was then matched to European public opinion positions on the economic left-right scale (using Eurobarometer data as well as data from Devin Caughey, Tom OGrady and Christopher Warshaw). The main outcome measured is the standardised difference between EU policies and European public opinion.

I find that EU policies decided by codecision more closely track shifts in public preferences than those decided using other decision rules. Figure 1 below shows the main results from the analysis graphically by plotting the policy-opinion standardised distances over-time and by policy sub-topic/group. The image shows that post-1999 legislation decided by consultation (the most territorial procedure) is farther from public opinion than legislation adopted under codecision.

This means that EU legislation in employment policy tended to further deviate from the public mood after 1999. Had codecision not been introduced, we would have therefore seen an overall increase in policy-opinion mismatches in this policy area post-1999 (the complicating effect of enlargement on the Council-led aggregation of European public opinion might be a reason for this post-1999 trend). Legislation decided by codecision also appears to better track the public mood than that decided by cooperation.

Figure 1: Absolute policy-opinion difference by treatment group

There are some signs, therefore, that codecision a reform that fundamentally changed how EU laws are passed by increasing the powers of the European Parliament and majoritarianism in the Council has indeed improved the democratic credentials and the democratic legitimacy of EU policies (measured as the policy-opinion link).

This has significant implications for international organisations, and it speaks to some important EU reform proposals that are currently animating the Conference on the Future of Europe. The backlash against globalisation is, according to some, partly due to international organisations having a democratic deficit. If international organisations are serious about tackling their democratic deficits as they acquire salient, redistributive policy competences, moving away from territorial, inter-state bargaining should be prioritised.

These findings furthermore lend credence to the expectation from democratic theory that strongly territorially weighted decision-making rules can hurt the democratic legitimacy of policy outputs. My study thus has implications for any political system that strongly relies on territorial representation: democratic discontent, in fact, is expected to be higher in such systems since their policies are expected to track public opinion preferences less well.

For more information, see the authors accompanying paper at the Journal of European Public Policy

Note: This article gives the views of theauthor, not the position of EUROPP European Politics and Policy or the London School of Economics. Featured image credit: CC-BY-4.0: European Union 2022 Source: EP

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Strengthening the European Parliament has brought EU decisions closer to the views of the public - London School of Economics