Herman Van Rompuy, the president of the European Council, and Didier Reynders, the president of the Economy/Finance Council, are cautious. Nonetheless, they did not hesitate in pointing out the very soon approaching deadline at which, in their opinion, two fundamental elements of the new and re-emerging EU would become operational - economic governance and supervision of financial activities. The question of these instruments becoming operational at the beginning of next year is already being posed but for the time being, the authorities responsible for this matter will have to look at the progress accomplished at the beginning of the week, in order to confirm this date.
In an effort to avoid repetition and not wishing to bore my readers, I will refrain from over-emphasising the fact that despite the professional doom and gloom merchants, Europe is making progress. The ongoing process will continue in September and in the coming months, and all the major institutions will be involved in it - the European Council, the Eurogroup, the European Parliament and the Commission. Yesterday, our publication provided a report on recent developments and I will add a number of other comments.
1. Finance and how it will be supervised. The Council agreed to some of Parliament's demands on the powers of the supervisory bodies and how they will work. Compromise proposals will be submitted to MEPs by the Belgian Presidency and Mr Reynders will have the degree of flexibility needed for drafting the texts. Yesterday, our publication reported on the cautious optimism expressed by Michel Barnier, the vice president of the Commission, with regard to this dossier. On Wednesday, the Parliament, Council and Commission met for a trialogue: the Parliament could vote in its first plenary session in September and the Ecofin Council will be meeting on 7 September. Qualified majority voting rules apply on making decisions on these matters. Everything would suggest that in a few months' time, the management and control of financial activity will be transformed. The official press release indicates that during the Belgian Presidency, the Council will do its best to ensure that the new supervisory mechanisms are in place by the end of the year. The press release also highlights other legislative initiatives on which work will continue: regulation of hedge funds, derivatives, short selling and bank deposit guarantees.
2. European economic governance. The taskforce presided over by Herman Van Rompuy and the European Commission are at the same time working on a vast package of measures to shape this dossier. I believe, however, that it would be mistaken to talk of any institutional conflict: the Commission is using its right of initiative; the taskforce helps finance ministers and Olli Rehn, Jean-Claude Juncker and Jean-Claude Trichet to prepare the European Council's orientations and Council decisions. The objective is so revolutionary that we cannot yet dare say whether the EU will succeed. Nevertheless, several factors confirm that the first European semester (see this column in EUROPE 10174 for the importance and scope of this initiative) will be the next one, namely, January-June 2011.
The results of the meeting were published in yesterday's publication. It is in this context that Mr Van Rompuy confirmed that the final report will be presented to the European Council in October and that the first initiative resulting from the working group involves introducing the European semester in 2011.
The Ecofin Council is preparing the modifications required for the Stability Pact code of conduct so that the provisions in the European semester are rapidly clarified, particularly those involving: a) each member state's presentation of its stability and convergence programme in April or during the spring; b) joint discussions will take place before approval of the national budgets.
How many other dossiers? Is it necessary to point out how many other dossiers there are on the table, which are just as important? The Franco-German invitation to relaunch the global tax on financial transactions (EUROPE 10179) will be discussed in September. At the same time, however, the banks themselves are preparing a fund that they will be financing and which in their opinion, would replace any new taxation … The Commission proposal to strengthen savers' rights (EUROPE 10179) had significant resonance in the media, which could subsequently help (as indicated by Michel Barnier) to re-establish public confidence. This would already be an important result. We could say as much with regard to the criticism made by Mr Trichet, the president of the ECB, of the rating agencies: “It is perhaps appropriate that we do not continue to have a global oligopoly of three rating agencies, which exacerbates the upward and downward trends for the financial markets”. It is encouraging that Moody's downgrade rating for Portugal did not influence the markets this time. Is this a symptom?
(F.R./transl.fl)