This week, the European Parliament passed a resolution raising concerns about the uncertainty caused by delays in financial services sector reform, which, it says, is in turn holding up sustainable economic growth and job creation. The vote followed a debate at the plenary session of the European Parliament.
A lack of progress in the Council
The European Parliament criticises the Council for a “lack of capacity and determination” to achieve the agreements needed to implement the outstanding legislative programme, including the reviews of the directives on Deposit Guarantee Schemes and Investor Compensation Schemes, the MiFID Review, the regulation on Central Securities Depositories, UCITS V, IMD II, the RRD, Omnibus II/Solvency II and CSMAD/MAR. It calls for progress and asks the Council to explain:
- the criteria for chosing whether to proceed with files or not
- how it proposes to resource and improve transition from Presidency to Presidency
In the light of what the European Parliament describes as a lack of progress in Council working groups, it calls on the Council to adopt positions by qualified-majority voting.
Delays on the part of the Commission
The Commission is urged to accelerate its work on outstanding legislative initiatives, including the Securities Law Directive, a proposal on money market funds, a review of the Financial Conglomerates Directive, a regulation establishing a Single Resolution Mechanism and proposals on bank structural reform.
The European Parliament urges the Commission to bring forward its proposals on Insurance Guarantee Schemes and on a recovery and resolution framework for financial institutions other than banks, including a framework applicable, at least, to larger cross-border insurance groups and those with significant activity in non-traditional and non-insurance activities, in time to allow for consideration by the European Parliament in the current legislative term.
The Commission is also asked to complete a study comprising:
- a cost-benefit analysis on the effectiveness and proportionality of the legislation adopted since the beginning of the financial crisis
- an accumulative impact assessment of all the EU financial market legislation that has been proposed, decided and implemented in the Union since the beginning of the mandate
- assessing the impact of failure to complete the Banking Union in the different Member States, including the effects on sovereign debt.
As the G20 agenda continues to put pressure on the European institutions, some fault lines are appearing.
This is not the first time the Commission has come in for criticism from its co-legislators. We commented previously on the withdrawal of the European Parliament’s objection to EMIR technical standards, and on the written communiqué from 11 Member States expressing “concern” about the Commission’s approach with respect to implementing the AIFMD. However, on this occasion, the MEPs were generally less critical of the Commission than of the Council.
During the debate which preceded the plenary vote on this resolution, Mr Gauzes went so far as to suggest that the Council’s attitude was calling into question the loyal cooperation between institutions, and expressed concern about the possible legal uncertainty for businesses linked to the lack of progress on the financial services files and, more globally, at the negative results of the current blockage for European public opinion. Ms Creighton, in a statement on behalf of the Council, stressed that:
“…it is also true that some of the Commission’s proposals, as well as the amendments proposed by the European Parliament, need to be improved. For this we need to draw on the expertise in Member State governments. Our main objective has to be to deliver high quality legislation which is realistic, effective and operational. We should aim to deliver fast, but not sacrifice quality as a result.”
The European Parliament has stressed that it is willing and able to deal with the Commission’s proposals swiftly and within very short time frames. However, whilst emphasising the responsibility of the co-legislators to take all necessary actions to allow for the adoption of the pending proposals as soon as possible, the European Parliament does appear to acknowledge that progress should not be achieved at the expense of the quality of the outputs from the European legislative process, recognising that actions should only be taken before the end of the current legislative term “where appropriate and feasible”.