Fundamental stage. An important step has been taken in the direction of controlling financial activities, with efficient supervision of inappropriate activities and abuses committed in this domain (see our previous publication). It would be an exaggeration to claim that, as a whole, media channels have done this event justice. In the past, they have only been too willing to report on disagreements and obstacles. We know only too well the golden rule: Europe is interesting when there are divergences between member states and conflict between institutions; but how do you expect to get the public interested when announcing that Parliament and the Council have reached an agreement on the creation of a European supervisory mechanism?
It is, nonetheless, a fundamental stage in the process of eliminating crises that are prone to destroy the economy of a given country and the well-being of its people. The EU will now have instruments that will enable it to control the behaviour of financial actors and for it to take swift action. Obviously, it is far from perfect: the agreement between a Council bringing together the representatives from 27 governments and the Parliament, where all the different political tendencies are represented, obviously required compromise and is not entirely comprehensive. The criticism, however, legitimate and sometimes justified, should be accompanied by the observation that supervision, despite it containing a number of imperfections, constitutes radical progress compared to total impotence; the comparison should be made with the previous vacuum and not on the basis of an ideal theoretical system, devised in accordance with one's own individual preferences. Systematic rejection reflects the fanaticism of those who prioritise their own doctrine and convictions above the general interest. Some of the criticism that can be read borders on indecency.
An efficient parliament. Parliamentary negotiators have obtained considerable improvements on the Council's initial proposal and the final text includes the mainstay of the Commission's proposal, which was largely inspired by the de Larosière report. It should be noted that the possibility of the new authorities suspending at-risk financial product trading has been introduced. Although the Parliament has given in on a few aspects, this is only temporary. For example, the scattering of the European supervisory authorities in three different cities (London, Paris and Frankfurt) is not definitive and will be re-examined.
The commissioner responsible for financial services, Michel Barnier, was able to declare: “We did not have the monitoring tools to detect the risk which was accumulating across the system. And when the crisis hit, we did not have effective tools to act. With the new supervisory framework that we are creating, we will be equipped to face the future.” The Council will confirm the agreement on Tuesday and the Parliament will do so during its plenary session on 21- 22 September. There is now no doubt about the results because the president of the Council, Didier Reynders from Belgium, obtained the necessary guarantees from his colleagues, and the reactions from the Parliamentary groups guarantee (despite the criticism and demands regarding certain aspects of the agreement) a comfortable majority. Mr Barnier has already announced that the Commission will present legislative texts in the next few days on regulation of derivatives and short selling, which will build on the powers of the new European supervisory authorities.
Moves towards comprehensive revolution. The agreement on supervision is only the first element in the ongoing revolution, and other innovations and transformations will be put into practice by the end of the year, which go beyond the indispensable regulation of the financial markets. Drafts on the taxation of banking establishments are making progress (the Ecofin Council is discussing the matter this very Tuesday, particularly with regard to the allocation of resources) and the same goes for taxing financial transactions (which must, nevertheless, be negotiated at an international level). European economic governance is beginning to take an increasingly clear shape, more than 10 years after the denunciation made by Jacques Delors of the imbalance between the monetary and economic chapters of EMU. The European semester preceding approval of member states' national budgets will be operational at the beginning of next year. The principle of strengthening the Stability Pact has been agreed, even though some essential aspects of it are still being discussed, such as: the kind of sanctions to be levelled against states that are failing to meet the criteria (mainly financial but also political?); the taking into account not only of annual deficits but also the overall debt of member states.
In a few months' time, the structure of Europe's economic and monetary policy will have been entirely renewed, even if deadlines will be necessary for applying some of the innovations.
(F.R./transl.fl)