The European Parliament announced last week that it will today send a letter to Commission President Jose Manuel Barroso outlining significant concerns over the agreement reached between EU member states last month.
The concerns focuses on the agreement to use an intergovernmental treaty to set up the resolution fund – a move demanded by Germany to provide additional legal safeguards against the pooling of risk and resources. The Commission has also raised concerns. More widely it relates to the fact that both the EP and Commission are unhappy with the compromise struck, believing it does not go far enough and does not follow the 'community method'.
According to numerous media reports and a statement by the EP, this dispute could delay the adoption of the SRM until after the European elections – a delay which could increase market uncertainty, especially around the bank stress tests.
The prospect of a legal challenge has also been raised. But, would the EP have a case? Unfortunately, at this stage we have more questions than answers for you, but below are a few points to consider:
- Given that the main point of contention relates to the intergovernmental treaty, which is outside EU law, it’s not clear that the EP has a role to play or has any legal protection to fall back on.
- That said, since much of the rest of the regulation is within the EU framework, the EP could potentially suggest its role as a 'democratic check' is being circumvented.
- To be frank, it’s really not clear either way at this early stage. But this could prove to be a very interesting test case if it ever does come to pass. Throughout the crisis there has been a working assumption that the eurozone can build the necessary structures to help solve the crisis through a combination of EU laws and intergovernmental treaties. If this is thrown into doubt, the view of the future of the euro could begin to change.
- It also has wider implications that affect the UK. The banking union deal illustrates the limits of the existing treaties and, as Chancellor George Osborne told our conference, that they are increasingly unfit for purpose in accommodating different degrees of integration. Intergovernmental treaties have been touted as the answer to any awkward UK treaty demands, but, if the scope for such treaties is limited, full blown treaty change of the sort David Cameron would like to use as a forum for reform might become unavoidable.
The EP wants to be involved in many decisions. At this time I'm not sure if there is anything that Eurocrats don't want to be deciding. It would be nice if eurocrats would come clean and state which (if any) powers they think should remain with nations and individuals.
ReplyDeleteAfter the oliveoil-container fiasco followed by the tobacco directive I'm surprised that people are still allowed to choose the colour of their clothes. Wouldn't the single market work 'better' if only one colour would be allowed? Just imagine the efficiencies of scale ;-)
A sidenote
ReplyDeleteEP elections go splendid for the EU-sceptics.
EP has apparently still as its top priority putting itself on the map, in which way seems unimportant like here.
My idea would be that top priority is credibility. And when that would be solved they would be on the map anyway. But by respect earned, which looks a lot more sustainable.
EP 'top-candidates' are the most sorry bunch immaginable. Also making all the wrong noises. Candidates would have been difficult but basically if you want to give body to the EP fraction you need leaders that appeal also to people in other countries. Reding, Vanhofstadt, Schultz. How unappealing can you get. In not their native countries most people will see them as a bunch of weirdos, funny foreigners.
Same with their rhetoric. Utterly unappealing for large groups.
Starts to become clear that in a lot of countries there might be a polarisation on the EU. But with the Euro-sceptics putting their vote where their mouth is. And with the Euro-philes hardly any movement.
Big gamechanger.
Also a lot of credibility problems with traditional parties will lead to a lot of yellow cards. In the way as they see the EP elections as unimportant they warn their traditional party by voting for populists or Euro-sceptics. Apparently IP is ahead in the polls re EP while roughly only at half that result for Parliament.
That is great as far as pressure on the reneg goes. A lot of people will finally wake up. But very likely as well a lot of Tory MPs will get very nervous (and the fraction already often looks like a flea circus).
This should be better managed. Displeased MPs can be a help (when they put indirectly pressure on the other side of the table). But can also be a huge pain in the backside when like often now everybody thinks their strategy is best and strategies can be changed every week or so.
Re Banking union. Missed in the media drop from 8 to 6% in the stresstest. Basically means that the North is considerably more likely to pay via the ESM etc for the rubbish in the South. Also missed that even with 7% capital and realistic valuations the gap is 770 Bn. So with 8% my 1 Tn was probably spot on.
As said many times this is a Catch22, easy tests hidden liabilitiy moves up North. Real rest and there is no money to fill the gap not by far. Only buying time, what is new?
Anyway the main issue is that rubbish banks mainly for local political reasons are simply notcleaned up. If the last 5 years have been an indication for the speed of things. My grandchildren will be dead and burried before the last zombie of this crisis will get its silver bullet.
Many of the treaties and other mechanisms set up by our 'leaders' with respect to the EU and MananaZone are clearly just not fit for purpose.
ReplyDeleteEurope is getting itself deeper and deeper into a fudge because of their 'one-size-fits-all' approach.
What is required is room to manoeuvre speedily in order to keep EU nations efficient and competitive.
I just cannot EVER see that happening unless we leave the EU.
Free trade. No sovereignty.
SC
I'm currently going through the scrutiny of the banking-union as done by the Swedish parliament. However, the demands for secrecy from EU makes it impossible for me to follow the proposals.
ReplyDeleteIt would appear that the Swedish tradition of transparency has now been completely superceded by EU demands for secrecy. To make matters worse it is now the case that the limited information that actually is being made available is seldom made available on time (within two weeks of the meeting).
A sinister explanation would be that accountability is impossible without the possibility of scrutiny. Since that explanation isn't plausible I'm wondering what is the real reason for making scrutiny all but impossible?