Brussels, 15/07/2010 (Agence Europe) - The trialogue meeting on Wednesday 14 July brought some progress on proposals for the reform of the European framework for financial supervision, but differences remain between the Council and the European Parliament (EP) on the powers of the new European supervision authorities (see EUROPE 10180). According to a number of sources, discussions will not resume until the end of August or start of September. Belgian Finance Minister Didier Reynders, whose country holds the rotating presidency of the Council of the EU, is putting on a brave face. Negotiations with the EP “went well” and “we are very much in the finalisation stage” of the compromise, he told AFP. The issue could be raised at the COREPER (committee of member states' permanent representatives to the EU) meeting next Thursday. The aim is still for the Council and the EP to endorse these texts in the first half of September so that the supervision authorities can begin their work on 1 January 2011 as planned.
Wednesday's meeting was successful in that it brought the EP and Council positions closer, in particular on some of the powers to be given to the European Systemic Risk Board and the other three European supervision authorities: the European Banking Authority, the European Insurances and Occupational Pensions Authority and the European Financial Markets Authority. These will be able, under certain conditions, to prohibit financial products or practices, such as short selling. They will also be able to act as mediators in disagreements between two supervisors in countries. The principle allowing these authorities, in situations of emergency, to enter into direct contact with an establishment without going through the national supervisor, will also be agreed between the Council and the EP.
However, European supervision of European bodies which are pan-European in nature, such as clearing houses, continues to be problematical.
Philippe Lamberts (Greens/EFA, Belgium) said after the trialogue meeting: “We want to reach agreement, but this will only happen if the Council position changes dramatically”. Sven Giegold (Greens/EFA, Germany) also thought that the Council had to shift its stance and said that the discussions “revolve around the powers granted to the supervision authorities. To prevent any further crises, it is essential that these authorities have the inalienable right to intervene in the markets,” he said. Among other areas of conflict is the extended safeguard clause that EU countries want. According to the MEPs, such clauses should only be able to be invoked in the event of a significant effect of national budget spending. The EP is demanding that the chairmanship of the European Systemic Risk Board (ESRB) be given to the president of the European Central Bank. The British delegation strongly opposes this move.
The Council would appear to continue to want the authorities to be located in three different cities - London for the Banking Authority, Paris and Frankfurt - rather than concentrate them in one city. The EP would prefer all three authorities to be based in Frankfurt. (L.C./transl.rt)