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Eu Presentation Training Presentation Transcript

  • 1. Briefing for XXXXX: How does Brussels Work ? Brussels, 11 October 2006
  • 2. Brussels: Why bother ? “Soon, 80 % of the laws implemented in EU Member States will emanate from Brussels” 2
  • 3. A bit of history: Major Treaties 1951: Creation of European Coal and 1957: Treaty of Rome creates EEC Steel Community († 2002) (2002: integrated ECSC) 1999: Treaty of Amsterdam 1992: Treaty of Maastricht creates EU 2000: Treaty of Nice recasts powers 2006/7: Constitutional Treaty? and Council voting weights • Evolution of policies: farmer subsides reduced from over 70% of the EU budget in the ’60s to less than 40% today 3 • Constitutional Treaty would make decision making easier
  • 4. Key principles of EU/Domestic law • EU law takes precedence over domestic law. • However, there is no real sanctions against Member States which deliberately infringe EU law. • EU law provides for non discrimination against non residents only – however it does not prohibit discrimination of a Member States against its own nationals 4
  • 5. Enlargement Basics + 75 million people (20%)   + 34% Area  But only 5% increase in GDP EU Institutional 162 MEPs out of 732 from new MS   Combined total 80 Council votes out of 321 (10 vote below blocking minority) Political culture New MS more ‘Atlanticist’ & pro-free market  Sensitive to being treated as poor countries  Keen to benefit from EU funding  Transfer of funding toward the East is an issue  Voter euro-apathy/scepticism already! 5 
  • 6. Understanding EU processes 1) The EU Institutions 6
  • 7. Interaction Between Main Institutions Commission Initiates policies and laws and represents the interests of the Community EP Council Adopts legislation and Hardly a “Parliament”, represents the Member States. but plays an increasing The most powerful legislative role in the process 7 institution
  • 8. The Commission Key institution: Technocratic: similar to MS  government ministries but with sole right to initiate legislative proposals Appointed by Member States but do Defines and initiates EU  not represent them – Article 213 policies Responsible for enforcement Array of vested interests exist  within the Commission (infringement procedures, competition) All decisions must be collegiate  Political accountability vis-à-vis the EP 8
  • 9. European Parliament Not quite a “Parliament”  Initially called the “Assembly” –  performing the role of an auditor Legislative powers are increasing with  Co-decision procedure – can oppose legislation 732 since June 2004 but only a  handful need to be lobbied on any single issue 9
  • 10. Council - Member States The most important legislative institution: - Role of each MS is limited -  coalitions are key Vote weightings give greater  power to larger Member States Adopts (with the EP) Blocking minority is main  Directives and Regulations obstacle (90 votes out of 321) Preference for consensus gives  Mandates Commission on opportunities for horse trading some policies (e.g. negotiations with Initial work takes place in  Working Group and Coreper international organisations) Can ignore EP and Commission’s opinion – but 10 this has a cost
  • 11. Understanding EU processes 2) The legislative procedure 11
  • 12. How it Works : The Broad Picture proposes Commission Parliament Directives Amendments proposes Transposition into consults MS law ECOSOC Adopts Council CoR Regulations Directly applicable in MS Council and Parliament are co-legislators under the co-decision process 12
  • 13. Timing is crucial Why should XXXX act now when law will only be in force in 3-5 years ? Difficulty to change draft 2nd Reading Good conciliation luck! Working groups 1st Reading EP committees Inter-service Written procedures / cabinets consultation Drafting Officials/DGs 13
  • 14. Government Support Is Not Enough 2nd Reading Conciliation Short deadlines (Services Directive ?) Involvement of MS Main role of MS/ 1st Reading Common Position Consultation No institutional inter-service role for MS Drafting 14
  • 15. Understanding EU processes 3) Key stakeholders and issues 15
  • 16. Commissioner Charlie McCreevy Commissioner for Internal Market and Services (DG Internal Market) Former Irish Finance Minister (1997 – 2004) and President of ECOFIN Priorities:  Better regulation at the top of his agenda – “No legislative provision will get the McCreevy stamp, let alone that of the College, without the better regulation tests being passed with flying colours” – too early to judge the results …  No rush for a new raft of legislation on financial services in the retail area  Services Directive shows he does not want up to upset Parliament – he would follow Parliament’s view no matter what the substance was! 16
  • 17. Commissioner Neelie Kroes Competition Commissioner Former Cabinet Minister in Dutch Government Former Director of numerous companies Priorities: Tough-minded and plain speaking – if the banking industry does not  have enough time to prepare adequate responses to Commission questionnaires then ‘that is life’ “The more they [banks] do to bring profits from card payments down to  acceptable levels, the less likely they are to face action under EU anti- trust rules.” 17
  • 18. Commissioner Markos Kyprianou Commissioner for Health and Consumer Protection (DG SANCO) Former Cypriot Finance Minister (2003 – 2004) “Impressive” EP’s Internal Market and Consumer Protection Committee Priorities: Improving information to consumers  Ensuring that consumer protection is taken into consideration in all  EU policies Very low profile on Consumer Credit Directive, but he was determined  that a consolidated document would be produced 18
  • 19. What is the Lamfalussy process? Lamfalussy process is “comitology” “Comitology” Level 1: legislative acts  Delegation of implementation  Level 2: technical  powers to the Commission Implementation : focus is on rule Based on a “framework  making activities Directive” Level 3: supervisory authorities  Commission adopts  exchange information, implementing acts based on supervisory convergence, best specific committee procedure practice and provide advice to the Commission EP has virtually no role  Level 4: enforcement  EP currently has no role and  asks for re-consultation 19
  • 20. What is the financial services infrastructure under the Lamfalussy process? Banking Insurance and Securities Occupational (including Pensions UCITS) Regulatory European European Insurance European committee Banking and Occupational Securities Committee (EBC) Pensions Committee Committee (EIOPC) (ESC) Committee Committee of Committee of Committee of of European European Insurance European Supervisors Banking and Occupational Securities Supervisors Pension Supervisors Regulators 20 (CEBS) - London (CEIOPS) - Frankfurt (CESR) - Paris
  • 21. How does it work? European Parliament ECOFIN Commission Lamfalussy level 2: EBC, EIOPC, ESC MS Reps+Technical Experts Lamfalussy level 3: CEBS, CEIOPS, CESR Supervisors from MS 21
  • 22. Key issues for insurance and pensions sector Portability of supplementary pensions  Tender on insurance guarantee schemes  VAT on financial services and insurance  White Paper on investment funds  Audit liability  Solvency II  22
  • 23. Consumer Credit Directive Seeks to update consumer credit rules of 1987  Original proposal of September 2002 was badly drafted and  unbalanced, placing all the burden on the industry First reading in European Parliament re-wrote the proposal  Discussions are underway in Council Working Group, with  outstanding difficulties for industry on: – Inclusion of APRs in overdrafts – Right of withdrawal – Advice and information requirements still of some concern 23
  • 24. Payment Services Directive Seeks to set out prudential rules for non-banks and to harmonise  rules in areas such as – execution time – D+1, D+1.5 or D+2? – disputed payments, – authorisation of payments – irrevocability of payments and refunds Parliament has voted on the Gauzes report in committee -  negotiations underway between Commission and Parliament – the intention is to have a “first reading agreement” 24
  • 25. DG Competition Sector Inquiry To identify competition concerns that may require investigation and remedy under  EU competition rules, relating to: – Payment cards – Retail banking (current accounts and related areas) – Business insurance Results so far:  – Payment market is very fragmented, with 25 national systems and little cross-border activity – In retail banking, there may be barriers concerning payment systems, credit databases or other factors which may reduce cross-border mobility – Preliminary findings on business insurance still to be published. Commission to announce its response late 2006/early 2006  25
  • 26. Mergers and Acquisitions New proposal to improve supervisory approval process for mergers  and acquisitions in banking, insurance and securities sectors. The Directive will seek to:  – Provide supervisory authorities with a clear and transparent process for decision-making and notification - there will be a closed list of criteria upon which the acquiring company will be assessed, such as the reputation of the proposed acquirer, financial soundness etc. – Reduce the assessment period from 3 months to 30 days; – Allow the supervisory authority to 'stop the clock' on one single occasion, under clear conditions. 26
  • 27. Green Paper on Mortgages Green Paper raises suggestion of introducing EU mortgage  regulation in certain areas, e.g funding, collateral, client creditworthiness, information requirements Commission has set up a specific expert group to look at  funding issues European Parliament is taking a cautious line – no more  legislation than is needed and any measures should be strictly targeted Commission to bring forward White Paper in Spring 2007  27
  • 28. Forthcoming Issues – 2006-7 Report of expert group on bank accounts and customer  mobility Communication on deposit guarantee schemes  Green Paper on enforcement: arrestment of bank accounts  Revision of E-Money Directive  Conference on financial education and literacy  Further measures related to SEPA?  28