On Monday 28 May, the committee on economic and monetary affairs (ECON) of the European Parliament examined some 231 amendments tabled to the own-initiative report by Brian Hayes (EPP, Ireland) on relations between the European Union and third countries on the regulation and supervision of financial services.
Readers may recall that the text invites the Commission to adopt a legislative act establishing a clear framework for the transparent, consistent and systematic application of equivalence procedures, which determine that the financial legislation of a third country is equivalent to that of the EU.
When the report was presented in committee (see EUROPE 12008), everyone stressed the link between this dossier and the scheduled withdrawal of the United Kingdom from the EU. Although the rapporteur hopes to sideline the Brexit issue to make progress on the matter, others - notably the S&D group - do not see how the two can be kept separate. This is, moreover, not the only source of disagreement between the MEPs.
Equivalence versus mutual recognition
In his report, Hayes stresses the unilateral nature of the equivalence decision and presents the mutual recognition of rules as a means of international cooperation to be prioritised – a point which was the subject of many amendments.
The ALDE group considers that equivalence decisions should be made unilaterally by the EU in order to preserve financial stability. The S&D group also considers that the new framework should not water down the European rules set in place following the financial crisis and that, in this regard, that the mutual recognition system has certain weaknesses.
The inclusion of a chapter on financial services in trade deals with third countries was also discussed. “What we are challenging is the fact that it is systematic. I think that we should be more targeted in our approach”, said Philippe Lamberts (Greens/EFA, Belgium).
Implementing acts vs. delegated acts
The draft report makes the case for more in-depth Parliament controls for equivalence decisions and suggests that these should in future be made by the Commission through delegated acts rather than in the form of implementing acts, to give Parliament scrutiny.
As far as the rapporteur is concerned, the aim is no more and no less than coming into line with the position adopted in 2016 in the 'Balz' report (see EUROPE 11470), which went in this direction, but there is no consensus on this matter either.
The ECR group feels that Parliament has no place being involved in these decisions and the S&D group's position is still fairly uncertain. According to the European rules, delegated acts should be limited to technical matters, Jonás Fernández (S&D, Spain) pointed out.
Lamberts said that the political nature of equivalence decisions is undeniable and that going down the delegated act road as a safety net should not be ruled out.
At the end of the debate, the rapporteur said that a certain majority was slowly emerging in favour of scrutiny for the Parliament, one way or another.
He also reiterated that from the beginning, his ambition for this text has been to have a consistent Parliament position and, therefore, achieve a large majority ahead of the committee vote scheduled for 18 June. (Original version in French by Marion Fontana)