Thursday

29th Feb 2024

Deal reached on pan-European financial supervisors

  • MEPs lost out on a number of their key demands (Photo: snorski)

After months of tough negotiations, the three sides of the EU triangle came to agreement on Thursday on the creation of financial supervisors intended to put an end to economic crises such as those of the last three years before they appear.

The European Commission, the European Parliament and the EU member states reached a political deal to set up a European Systemic Risk Board and three separate agencies to monitor securities, banks and insurance companies.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Internal market commissioner Frenchman Michel Barnier called the deal "a crucial milestone".

With the new supervisory bodies, the bloc will have "the control tower and the radar screens needed to identify risks, the tools to better control financial players and the means to act fast, in a co-ordinated way," he said.

The deal reached by representatives of the three sides of the European triangle must still be approved by finance ministers of the member states, who are expected to give the go-ahead next Tuesday, and the full sitting of the European Parliament, who are likely to themselves sign off later this month.

The heart of the fight had been between the increasingly self-confident parliament who feared a weak set of agencies would not have the power to correct dangers ahead, and member states, particularly Britain, who feared a loss of sovereignty in one of the most critical areas for a national government.

In the end, a compromise has delivered to member states the ability to appeal the decisions of the new bodies, something fiercely resisted by MEPs.

Another sore point was whether the president of the European Central Bank - the chief banker for the eurozone but not for all member states - should head up the new systemic risk board.

The deal reached on Thursday will indeed make the current ECB chief, Jean-Claude Trichet the boss at the new board, but only for five years, after which a new head would be negotiated once more.

In a major victory for the national capitals, it is they who will have the critical hand on the alarm bell. The member states are to be the ones to declare that there is an emergency on the cards, not the European Commission or the parliament.

Additionally, direct oversight of companies will not be performed by the new agencies, a task to be left with national supervisors. The new agencies are to only co-ordinate actions.

Finally, the parliament was also dealt a defeat in its attempt to have a unified headquarters for the four bodies. Instead of all being based in Frankfurt, they will now be located in London, Paris and the home of the ECB.

The legislation bringing all of this into affect will be reviewed in three years.

EU supply chain law fails, with 14 states failing to back it

Member states failed on Wednesday to agree to the EU's long-awaited Corporate Sustainable Due Diligence Directive, after 13 EU ambassadors declared abstention and one, Sweden, expressed opposition (there was no formal vote), EUobserver has learned.

Angry farmers block Brussels again, urge fix to 'unfair' prices

Following weeks of demonstrations across Europe, farmers returned to Brussels to protest over unfair competition in prices, as EU agriculture ministers met just a few metres away to discuss a response. The police used water cannon and tear gas.

EU's €723bn Covid recovery fund saw growth, but doubts remain

The €723bn Covid-19 recovery fund, launched three years ago, has been a success, according to a mid-term internal review — but less effective than initially predicted. And according to one NGO, the commission painted an "overly positive picture".

Latest News

  1. EU won’t yet commit funding UN agency in Gaza amid hunger
  2. EU Commission clears Poland's access to up to €137bn EU funds
  3. Right of Reply: The EU-ACP Samoa agreement
  4. The macabre saga of Navalny's corpse
  5. Belgium braces for Flemish far-right gains, deadlock looms
  6. Podcast: Hyperlocal meets supranational
  7. Von der Leyen appeals for 'new EU defence mindset'
  8. EU supply chain law fails, with 14 states failing to back it

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us