Brussels, 08/09/2010 (Agence Europe) - On Wednesday 8 September, with the Council and European Commission represented in the House, MEPs debated the outcome of the previous day's ECOFIN Council (see EUROPE 10209). The main results were: - confirmation of the political agreement on the new European financial supervision architecture; - political agreement on the “European semester” as part of the strengthening of budgetary governance; - the launch of a debate on taxing financial institutions.
Supervision. The agreement on financial supervision was not the end of the way, merely the first step towards a “new European organisation,” said Belgian Finance Minister Didier Reynders. He would like to see created, with effect from 1 January 2011, a European Systemic Risk Board responsible for drawing attention to and making recommendations on macro-economic risks threatening financial stability, and three European financial supervision authorities (ESAs) in the banking, insurance and securities sectors (see EUROPE 10207). Reynders, who currently chairs the ECOFIN Council, said that the agreement marked the start of “long debate” on the next legislative initiatives. Internal Market Commissioner Michel Barnier said the supervision agreement was also a first step. Next week, he will bring forward two legislative proposals on derivatives and short selling.
The representatives of the main political groups welcomed the political agreement on supervision while pointing out that much remained to be done. Sylvie Goulard (ALDE, France) said that work had to continue on giving the new ESAs binding powers in sectoral legislation. This will be the case with supervision of credit rating agencies and should also be so for derivatives central clearing houses and “ultimately for cross-border groups,” she said. Udo Bullmann (S&D, Germany) pointed out that the European Parliament (EP) and Council were still far from securing an agreement on the directive on alternative fund management.
European Semester. The introduction of a European semester was “the first stage” in strengthening economic governance, Reynders said, hoping to follow this up with new provisions beefing up sanctions (the Commission will bring forward proposals on 29 September). Like many of her colleagues, Anni Podimata viewed the ECOFIN Council decisions as a “key stage for economic governance”. She said that budgetary supervision and discipline must not be the end of the road, but that responses had to be found to citizens' expectations on jobs and social balance. “We need fairer shares,” she said. “As so often, the rules will be decided more by practice than by the texts,” according to Sophie Auconie (EPP, France) who said that it was necessary to go beyond formal coordination to a genuine concerted strategy on economic, industrial and social policies. “It is one thing to coordinate budgetary policies, the content is quite another,” stated Liem Hoang Ngoc (S&D, France), more critical of the strengthening of the Stability and Growth Pact (SGP) and the budgetary consolidation that accompanies it. “Imposing automatic financial sanctions is irresponsible” and will increase Euroscepticism, he argued. “On behalf of European integration, I say we have to be aware that strengthening the SGP is an economic aberration. It is also a serious political error,” he said.
Taxation of the financial institutions. “We have begun two debates, which will be continued at the end of this month at the informal Ecofin Council and which we hope to make progress with before the end of the year: one on the resolution funds or the banking contribution and the other on the taxation of financial transactions”, Reynders recalled. He feels that it is very important that these debates be kept separate. On the issue of the banking contribution, “in this debate, we should be able to agree, in the next few months, on mechanisms which will allow genuine coordination in Europe”, he added. As regards the financial transactions tax (FTT), the Belgian minister acknowledged that the debate was “much livelier” and that consensus was still a long way away. Barnier stressed the importance of properly balancing the measures being prepared. In October, he is to present a communication on the prevention of future crises and the national resolution funds. On the FTT, many of us believe that is a “fair idea”, but one which “by no means enjoys consensus”, said the commissioner. He also announced a report on the transatlantic financial rules, to be presented at the informal Ecofin Council.
Noting that the G20 had not made progress on the issue of a bank contribution, Corien Wortmann-Kool (EPP, Netherlands) pleaded for Europe to take a “pioneering role” in this field and in favour of coordination of national initiatives. However, she is opposed to Europe going it alone on taxation on financial transactions. On the FTT, “it is a cacophony, absolute bedlam!” at the Commission, joked Sven Giegold (Greens/EFA, Germany): Barroso and Barnier are in favour, Algirdas Šemeta is not. “Sing from the same hymn sheet!” he said. As for Kay Swinburne (ECR, UK), she said that the FTT would not be paid for by the financial institutions, but by pensioners and shareholders (A.B./M.B./transl.fl)