The majority of the European Parliament clearly appears to want greater financial regulation than the Council's position, and subsequently backs most of the positions put forward by the European Commission (see this column yesterday). Nonetheless, it should be pointed out that within the parliamentary committees, which are currently developing the drafts for submission at the plenary session, there is absolutely no desire to provoke a conflict with the Council. The rapporteurs certainly intend to strengthen the positions put forward by ministers, but the atmosphere is not conflictual. This is completely understandable and reasonable because there will be no European financial legislation if the Parliament and Council do not manage to agree with each other, given that they are both co-legislators on an equal footing. If an agreement is not forthcoming, everything will be held up. Only the far left and extreme right would wish this (in contempt of all democratic principles, as these political forces are very largely in a minority everywhere).
An overview is unrealistic. It is practically impossible to present a detailed overview in this column of the work currently taking place at the EP: the regular articles published on the subject can be consulted in our publication. There are many rapporteurs (four for the “supervision” aspect); the different areas of legislation being developed are progressing in their individual field; the timetables vary from one section to another; and it is unthinkable that an overall package can be submitted as a block to the plenary session. It should also be considered that certain essential aspects of future legislation, such as the Solvability II and “market abuse” directives, are currently being examined by international bodies, and the possible tax on financial transactions has been conferred by the G20 on the International Monetary Fund (IMF). This is normal, because appropriate provisions must apply at a global level. The EP can give its view on these aspects as well but this does not mean that it will be updating texts that are elaborated elsewhere.
The hedge funds black hole. I will just provide a few indications about some of the reports currently being prepared. With regard to hedge funds (the black hole of world finance, according to one commentator) the rapporteur Jean-Paul Gauzès (EPP, France) submitted a working document at the end of last year that called on his colleagues to take action. He certainly had a reaction: 1300 proposals for amendments! Most of them demanded a strengthening of the rules planned, others wanted them to be more flexible, whilst other parties simply suggested improvements to the wording. The rapporteur did not get discouraged - on the contrary, he considered the avalanche of amendments as proof of interest in the directive being discussed. He has already improved his initial draft, but is basically retaining the orientation for a reasonable regulation and is intending to respect the planned deadlines. Next week he will meet the shadow rapporteurs from the other political groups and will then work on the compromises. On 22 February he will present his position to the parliamentary committee. This will be followed by the trialogue with the Presidency of the Council (Spain) and the European Commission. The parliamentary committee vote will take place in April, after which it will be the turn of the plenary.
Strengthen the Council project. The supervision package is even more complex, with its four rapporteurs: Sylvie Goulard for macro-prudential monitoring (systemic risk);and José Manuel Garcia-Margallo (EPP), Sven Giegold (Greens) and Peter Skinner (Socialist) for micro-prudential monitoring. The full report will be submitted as a whole at the end of February during the economic and financial affairs parliamentary committee. This committee began its hearing on 27 January, during which Jacques de Larosière, president of the group from which the European Commission largely drew for its proposals, and Mario Draghi, president of the Financial Stability Board (FSB) expressed their opinions. The report for this hearing was published in EUROPE 10066. Mr de Larosière indicated that the Council had retained most of the recommendations made by his group but had weakened the autonomy of the three European financial supervisory powers - so well that most of the power would remain in the hands of the national authorities. This is the aspect that the parliamentary rapporteurs oppose - and which they seek to amend. Sylvie Goulard took a tough line on several positions made in this connection. Mr Barroso clearly indicated that he wants the Council to return to what the European Commission had advocated, namely the conclusions from the de Larosière report.
This column will be returning to the most important positions on the different aspects of this complex problem upon which the future depends. (F.R./transl.fl)