“We deeply regret that the compromise now on the table falls significantly short of the level of ambition needed,” Finance Commissioner Maria Luís Albuquerque told ministers during Friday’s public Ecofin debate in Luxembourg. “We need [the European Securities and Markets Authority] to become an effective supervisor. The current compromise text would not allow for that.”
France spearheaded a last-minute push over dinner Thursday to strengthen the watchdog’s executive powers. Paris took issue with a rule that would allow nine national supervisors to force the watchdog’s executive board to submit draft decisions for further scrutiny before they’re adopted. The Irish EU presidency tweaked the rule overnight to limit national supervisors’ ability to delay decisions and preserve the watchdog’s power to act in emergencies, according to a compromise document obtained by POLITICO.
That was enough for France and most other countries. But not for the Commission, nor European Central Bank President Christine Lagarde, who was equally critical of the Council compromise. Beyond the governance concerns, Albuquerque took aim at supervisory carve-outs that the Irish introduced to accommodate Germany’s push to exclude its stock exchange, Deutsche Börse, from EU oversight.
The carve-out club
The carve-out shields stock exchanges from direct EU supervision unless they meet certain thresholds for trading activity and cross-border reach. Spain’s stock exchange, Bolsas y Mercados Españoles, would also benefit from the carve-outs, triggering criticism from smaller EU countries that accused the waiver of granting the bloc’s largest nations preferential treatment.
Belgium was particularly critical because its Brussels-based securities depository Euroclear is expected to come under direct EU oversight and face supervisory fees, while some major stock exchanges could remain under national oversight. Belgian Prime Minister Bart De Wever will take the issue to EU leaders at the end of next week.
“We cannot support the carve-outs. The package includes as many ins as there are outs,” Belgian Finance Minister Jan Jambon said during Friday’s public debate. “I think Germany has won in certain cases.”