Important for citizens. European activity to transform the way the world of finance works is moving at an intense pace, but this activity goes largely unnoticed by public opinion (and often also by a few political forces, in good or bad faith) for the good and simple reason that the completion of the reforms is slow and gradual. We need to wait. Yet other European or international developments also deserve attention because of their effects on the everyday life of us all. Let me mention two of them - the first concerns an element of Europe's energy resources, and the second an aspect of the way the banking world works.
Mediterranean - natural gas resources exceeding forecasts. The existence of gas in the sea surrounding Cyprus - gas fields stretching towards Turkey, Israel and Lebanon - is well known. What is now surprising is the size of these gas fields. Oil companies are talking about reserves of around a trillion cubic metres - a figure which is difficult to fathom but which highlights a staggering reality. Israel, which already exploits gas fields within its own territorial waters, has now become a gas exporter (whereas it used to be a gas importer). Several global giants (Total, Noble Energy, ENI - and even the Korean company Kogas) are on site. The economic, and also political, effects of these discoveries will be more than considerable for Cyprus, and they will have an important influence on the EU as a whole.
Yet it is slowly and progressively that the manna will be available. The Cypriot gas will only be operational in a number of years from now - between 2018 and 2020 according to technical experts. It is true that part of the indirect effects will quicker - for example, ENI has offered to finance a plant for liquefying the gas on Cyprus. And then the political obstacles should be taken into account. Part of the island of Cyprus, as we are all too well aware, includes an autonomous republic that only Turkey recognises - and Turkey, of course, believes that it is the owner of part of the offshore gas fields.
Why do I put such emphasis on this issue? Because of its economic - and even political - effects. The EU depends on Russia, Algeria and Libya for its gas supplies and the extent of the gas fields around Cyprus will strengthen its independence. In addition, and importantly, the exploitation of these gas fields will lead to a reduction in price - a very important element for European industry (particularly in the face of competition from American industry) as European industry benefits, and will especially benefit in the future, from a cost of energy that will be in continual decline thanks to shale gas. To begin with, Lithuania has already asked Russia to reduce the price of the gas it delivers to the three Baltic countries, stating that Russia's price is excessive and unsustainable.
For these reasons, shale gas should have a great deal of importance for Europe.
Towards two bank categories? New discipline in banking activity is making radical progress in the EU, but considerable periods of time are needed to implement this discipline. That is why, in my opinion, a parallel initiative should be underlined - the relaunch of an important measure which the European institutions give the impression of having renounced. I'm talking about the clear and absolute separation of banks into two categories - commercial banks on one side, and merchant banks on the other. This is a system that existed in the USA between 1933 and 1999 (Banking Act) before being abandoned under Clinton. In Europe, this solution has never taken a clear and explicit form - with the banks having succeeded in putting forward a raft of reasons, doubtless technically appropriate, to avoid this, obtaining that the European institutions put it aside. In fact, support for this separation continues (in the European Parliament, the ecologist Philippe Lamberts asked for it again recently) but it is in the shadows and lack-lustre.
Thus the new attempt is not European - but American! Elizabeth Warren, a Democrat senator from Massachusetts, relaunched this idea in Washington, explaining that merchant banks must become boring again, without acrobatics or speculation. Under the current system, the four main American banks maintain risky operations, but gambling games should be far away from honest savings - Bank of America and Citigroup should renounce their trading activity.
Ms Warren acknowledges that the operation is tough - because the banks are powerful. Yet her new draft banking law is now before the Senate. We are waiting for a similar European initiative.
(FR/transl.fl)