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At the centenary edition of the monthly Brussels for Breakfast meetings, Graham Bishop was joined by David Harley (Burson-Marsteller) and Mats Persson (Open Europe) to discuss the political and policy developments of the last month and future weeks.
The meeting first addressed political issues – notably the obstacles and ambiguities on the path to appointing the next European Commission President. It was pointed out that the Lisbon Treaty in fact contains a legal imprecision that has let to the interinstitutional conflict between the EU Council and EP about who actually has the power to appoint the Commission President: "No-one knows what the Lisbon Treaty means". The question whether Jean-Claude Juncker will be presented by the Council to the Parliament might be voted on as early as later this month, at the next Council meeting on 26/27 June. Opposition to Juncker, most prominently from the UK, could result in a blocking minority if the "swing state" Italy agrees with David Cameron. In this context, Juncker’s visit to Italy was of utmost importance.
The British position opposing Juncker so early on (and so completely) was deemed very difficult – it was suggested that in Brussels the question “how Cameron’s climb down could be organised” was already being discussed. Another hypothesis was voiced with regard to the future chair of the ECON committee in the EP – given the Italian socialists’ strong performance in the EP election, the post might well be given to the Italians, given they are the largest faction in the new S&D group.
Overall, the composition of the new Parliament was thought to have reduced somewhat the chances for a successful completion of the TTIP negotiations and the diverse nature both of the “protest parties” as well as the calls for "reform" were highlighted.
In Banking, the drive towards a capital markets union was discussed. This parallel to the Banking Union is of existential interest to the City and would include issues such as securitisation, consumer protection, shadow banking and long-term investment. The AQR was reported to be on track yet still met with doubts as it was “taking the stress out of the stress tests”.
Securitisation continued to be pushed by the ECB, for reasons of price stability, bank stability as well as the stability of its own balance sheet, as the ECB’s own booksare 15% ABS. Yves Mersch was also calling for a "more holistic approach" to ABS, saying that the ECB plans could catalyse ABS issuance, the Eurosystem could buy "simple and transparent" ABS and ratings agencies should rate ABS without a sovereign cap.
Graham Bishop - Consultant on EU Integration - Political, Financial, Economic, Budgetary