EU, SA to strengthen bilateral cooperation in financial sector

The European Union (EU) and South Africa are forging stronger ties in the financial sector as part of a collaborative effort to enhance sustainable finance and address financial security issues. Mairead McGuinness, the EU Commissioner for Financial Stability, Financial Services, and the Capital Markets Union, led a delegation to South Africa to engage with local authorities and discuss areas of mutual interest. The visit aims to strengthen relationships and foster cooperation on key financial matters. McGuinness highlighted the importance of in-person meetings, emphasizing the value of face-to-face interactions over virtual communication platforms. During the discussions, McGuinness underscored the shared challenges faced by both the EU and South Africa, particularly in the realm of sustainable finance. The focus was on mobilizing private sector investments towards a more sustainable future. McGuinness commended South Africa's efforts in developing a taxonomy for sustainable finance and expressed willingness to collaborate on this front. The conversations also touched upon energy, inflation, interest rates, and broader economic conditions, reflecting a comprehensive dialogue on key financial issues. One of the central themes of the discussions revolved around the digital transformation and financial inclusion. McGuinness noted the rapid pace of digitalization, especially during the pandemic, and highlighted the need for inclusive access to digital services. She emphasized the importance of leveraging digital solutions for financial services while addressing challenges such as broadband access and data security. The dialogue also delved into the possibilities of open finance and potential initiatives like a digital euro. In terms of support for South Africa, McGuinness mentioned technical assistance and policy collaboration as areas of focus. The EU is actively engaged in enhancing financial security measures, including new legislation on anti-money laundering. Both regions are committed to ensuring a clean financial system and preventing illicit financial flows. McGuinness underscored the significance of cooperation in trade and development, emphasizing the collective responsibility towards sustainability. The issue of South Africa potentially facing a 'gray listing' by the Financial Action Task Force was also addressed during the discussions. McGuinness acknowledged the steps taken by South Africa to address the concerns raised and reiterated the EU's commitment to providing technical assistance in this regard. Collaborative efforts to combat money laundering and strengthen financial integrity were highlighted as priorities for both regions. On the topic of sustainable finance, McGuinness provided insights into the EU's approach, emphasizing the shift towards evaluating companies based on their sustainability impact in addition to financial performance. The EU's focus on sustainability reporting and incentivizing investments in green projects was discussed, highlighting the importance of supporting the transition to a more sustainable economy. McGuinness shared that the EU and South Africa are aligned in their commitment to advancing sustainable finance initiatives despite the challenges posed by energy transitions and infrastructure upgrades. The discussions at the EU-South Africa meeting reflected a blend of policy dialogues, technical collaborations, and strategic partnerships aimed at fostering financial stability and sustainable growth. In conclusion, the joint efforts between the EU and South Africa signal a promising partnership in the financial sector, with a strong emphasis on sustainable finance, financial security, and digital transformation. The engagement underscores the shared commitment to addressing global challenges and building a resilient financial ecosystem for the future.