-Notes on the inaugural
FSAP Timeline Forum organised by the European Policy Centre and GrahamBishop.com
The prospects for the Lamfalussy process dominated the discussions and it is abundantly clear that all three institutions – Commission, Council and Parliament - very are keen to succeed, despite their disputes.
Georgios Katiforis argued, in his opening speech, that it is not the European Parliament hampering progress on the Financial Service Action Plan. It is working consistently on its contribution to the timely achievement of the Plan. On the UCITS and Pension Funds Directive, for example, it was the Council holding up further progress in both cases. He also requested an adequate consultation procedure on forthcoming Commission proposals to avoid such huge problems as in the case of the Prospectus Directive.
The Parliamentarian also said that the Comitology process recommended by Lamfalussy has come very close to the line of what is constitutionally permissible in the legislative process. Given the complexity and technical character of various aspects of the legislation, it may be inevitable that non-legislative bodies will have to set the detailed rules. However, the process should be kept under the supervision of the legislative authority or the process risks losing the basis of legitimacy.
As no solution to this dispute has been found so far, the Parliament has asked its Constitutional Committee to report on this matter. A draft report prepared by von Wogau will be presented in Committee on 19 December and will be ready for consideration in January or February next year. He felt that the dispute would end up in the European Court if no resolution can be reached between the Parliament and the Commission.
Another dispute has arisen over the so-called 'sunset clause' for the European Securities Committee’s powers in 2004. Commissioner Bolkestein has said he will take this idea into account but would not give a firm promise. This distrust, Mr. Katiforis concluded, is fuelled by the fear that Parliament would abuse its powers, creating eternal delays in the FSAP’s progress.
The Parliament wants the following:
Advanced information on all specific legislative initiatives including regular meetings between senior officials and Rapporteurs
Legislative proposals should be addressed to governments, experts and the Parliament so that it is incorporated in the decision making process
Sunset clause for any legislation in 2004
The European Commission representative responded directly to this fear and deeply regretted the lack of confidence among the European institutions.
He warned of the immense damage to the Financial Services Action Plan – and thus to the European economy - that may happen if no agreement is found on the Lamfalussy process. In the case of failure, all the technical measures, which – according to Lamfalussy - should be decided by the two newly established Committees, would have to go through the full codecision procedure which would inevitably endanger the FSAP as a whole.
All parties show strong support for the Lamfalussy approach and with all other elements in place, the only remaining open question is the issue of institutional balance. Even though the Commission supports the concept of the EP’s 'call-back', there is a question of timing. According to a letter from Commissioner Bolkestein to the Chair of EMAC, Mrs. Randzio-Plath, the EP’s plan would mean a change in the recently agreed comitology procedure and probably a change of the Treaty. Either of these would delay the FSAP for years.
The concept of a 'sunset clause' in legislation seems to be accepted now and it was made explicitly clear that any secondary legislation adopted by Committees that might then cease would still be binding. This confirmation should allay any misplaced fears of confusion in the markets.
The Commission representative also reported an increasing interest in the FSAP in the recent weeks. This has been re-inforced by the events of September 11, as well as the introduction of euro notes and coins. The Barcelona Summit next March is clearly seen as a key date to demonstrate that the EU's governance system can produce rapid results when there is a will. The intention is that a package of proposals will be put forward at that event.
Jean-Paul Servais, Deputy Chief of Cabinet of the Belgian Minister of Finance, focused on the main achievements of the Belgian Presidency, and underlined the common will to succeed on the FSAP.
The Belgian Presidency has focused strongly on financial services and this has led to major and significant developments during the second half of 2001. He noted the following achievements:
Political agreement was reached on the Directive on Distance Selling of Financial Services on 27 September
The Directive on Money Laundering was adopted by the Council on 19 November
Political agreement was reached on the Regulation on cross border payments in euro on 26 November
The UCITS Directive was finally adopted on 4 December
Progress was made on the Prospectus Directive and the Directive on Financial Conglomerates at the 4 December meeting of ECOFIN
The last ECOFIN meeting under the Belgian presidency will be on 13/14 December. It will be a test case to transform technical progress into political results. Main topics on the agenda of will be:
Directives on Financial Collateral
Directive on International Accounting Standards and
Directive on Insider Trading and Market Manipulation.
Despite the differences on some of the constitutional issues, the ensuing discussion confirmed that all three parties were very keen to achieve progress and success on the Financial Service Action Plan and showing their strong commitment on the Lamfalussy timetable. Are Parliament and Commission only millimetres apart from a solution?
© Graham Bishop
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