The national governments of the EU are split over how much more power should be given to three EU supervisory authorities that monitor the banking, insurance and securities markets.
Sweden, which holds the presidency of the Council of Ministers, has so far failed to assuage concerns raised by the UK that elements of the proposal to increase the authorities’ powers would impinge on national governments’ prerogative to decide how to spend taxpayers’ money. Slovenia, Slovakia, Romania, Germany and Spain have voiced support, in varying degrees, for the UK position.
Finance ministries are also divided over what role should be given to the European Commission.
Their disputes are jeopardising the chances of the Swedish government brokering agreement on the proposed legislation for the 2 December meeting of finance ministers.
The Swedes have set the target date of December because the legislation on strengthening financial market supervision has yet to be approved by the European Parliament and is supposed – according to a declaration of the European Council in June – to take effect during 2010.
Instructions for institutions
The UK and its supporters are opposed to the Commission’s proposal that the EU supervisory authorities should be empowered, in some cases, to give binding instructions to financial institutions.
They are also concerned about a proposal that the European Securities and Markets Authority should have direct supervisory powers over “entities with Community-wide reach”, to be specified in separate legislation. The UK wants this power to be limited to credit rating agencies, as these are unlikely candidates for government bail-outs.
Some governments are also seeking a strengthening of a ‘safeguard’ mechanism proposed by the Commission that would allow member states to challenge decisions taken by the authorities. They are concerned that the mechanism, as proposed, only covers some of the authorities’ decision-making powers, and they want it extended.
Small countries’ fears
Other outstanding issues include reservations about making the Commission responsible for deciding when there is a crisis in the financial sector, and concerns among smaller member states that they could be marginalised by the voting rules in the supervisory authorities.
The member states’ permanent representatives to the EU will discuss the latest compromise proposals from the Swedish presidency today (26 November), but agreement is not expected.
Alistair Darling, the UK chancellor, will insist that any agreement reached between finance ministers on 2 December is provisional, as the UK wants EU heads of state and government to discuss the reforms at their meeting of 10 December.
He secured a promise at the European leaders’ summit of 29-30 October that there would be such a discussion.
Click Here: Maori All Blacks Store