What are the trends and events to look out for in the year ahead? CTMfile summarises some of the regulatory, political, trade and financial milestones that will shape 2018.
The revised Payment Services Directive (PSD2) has been described as “the directive that will change banking as we know it” and will apply in EU countries from 13 January 2018. For more detail read this CTMfile article: 9 facts to clarify how PSD2 will affect security and e-payments
The revised Markets in Financial Instruments Directive will apply from tomorrow, 3 January 2018. The updated directive was intended to address some of the financial weaknesses uncovered by the 2018 financial crisis by bringing more transparency in financial (equity, fixed-income, FX and exchange-traded funds) markets, as well as providing more protection for investors. The Financial Times called it “one of the EU’s most ambitious, yet controversial, packages of financial reforms”. The newspaper warns of financial institutions being unprepared for the switch at midnight – and gives an excellent summary of the legislation here. CTMfile has also covered some of the issues affecting corporate treasurers here: Preparations for MiFID II registers and transparency calculations in place
The General Data Protection Regulation (GDPR) will apply to all entities that store and process the data of EU customers, from 25 May 2018. With many companies still not quite there yet in their GDPR preparations, here are some useful pointers for compliance before the deadline: 8 steps to steer your company towards GDPR compliance
There are several political events for the calendar:
- Germany ended 2017 without a government as, three months on from the election, Chancellor Angela Merkel's Christian Democratic Union (CDU) is yet to form a coalition government. Talks are due to recommence on 7 January but reports say Germany is unlikely to have a new government before Easter.
- Italy is due to hold a general election on 4 March 2018. The Five Star movement current lead opinion polls with 27 per cent, followed by the PD with 24 per cent, but the election could see a come-back for former Italian Prime Minister Silvio Berlusconi, whose Forza Italia party could form a centre-right coalition with two other right-wing parties.
- The issue of independence for Catalonia could rumble on throughout 2018, as Carles Puigdemont, the former leader of Catalonia, recently urged Madrid to enter political negotiations.
- Greece's current bailout ends in August 2018 and the country could return to the international bond markets in the first half of the year.
- The US mid-term elections will be held in November 2018 and will be a test of the Trump administration, although anything could happen before then.
Trade negotiations and tensions
Brexit negotiations will continue throughout 2018 and negotiators will move on to 'stage two' negotiations. Other political trade issues that could have some impact on the year ahead include the negotiations on the North American Free Trade Agreement (Nafta), between Canada, Mexico and the United States, with talks set to continue in the first quarter.
In terms of the economy, PwC’s Global Economy Watch paints a positive picture for the year ahead: the global economy is set to grow by almost 4 per cent in 2018 in terms of purchasing power parity (PPP). This would make it the fastest growth since 2011 and most of the growth is forecast to come from the US, emerging Asia and the Eurozone. Meanwhile in the EU, quantitative easing is due to be scaled back during the year ahead and could be stopped altogether by the second half of the year.