European Union

The enduring financial crisis in Europe has exposed a tremendous weakness in the supervision of financial markets. What supervision was actually exercised not only failed to prevent a crisis but may have precipitated it.

In September 2010, the European Parliament and Council reached a political agreement to adopt three Commission proposals to effect a substantial change in the way financial supervision is to be exercised at the European level: to set up a European Banking Authority, a European Market and Securities Authority and a European Insurance and Occupational Pensions Authority. This document released in September 2010 provides a very brief overview.

When these different regulations are finalized and come into effect on January 1st 2011, the changes will be profound.

Professor Eilis Ferran of the Law Faculty, Cambridge University, England, has written a wonderful overview of the new supervisory system that puts it in its historical context and explains its significance. Here's what the abstract states:

Most of the big decisions about the rules governing financial market activity in Europe are now taken at the EU level. This has not been matched by a simultaneous centralisation of supervisory responsibility. Yet, notwithstanding that frontline supervision remains mostly a Member State responsibility, with a layer of EU-wide structural co-ordination added on top, the longstanding process of step-by-step assumption of supervisory functions by bodies that have a pan-European remit has undoubtedly accelerated in the aftermath of the financial crisis. This article examines the recent EU institutional developments with respect to financial market supervision against the background of arrangements at Member State level, and assesses their significance. It contends that whilst the recent EU institutional reforms are at the boundaries of current legal, political and practical feasibility, they include some key breakthroughs that bring the prospect of the European scene becoming dominated by euro-authorities with direct supervisory power across significant swathes of financial market activity considerably closer.

You can download the entire article, which is highly recommended, here.

There's big trouble brewing between the Council and the Commission.

The European Parliament and Commission have, apparently, concluded a new "Framework Agreement" on how the two institutions should coöperate (for a press release see here). This new agreement, signed on October 20, 2010, replaces the 2006 Framework Agreement (available here (main part), here (annex 1) and here (annex 2)).

The new Framework Agreement generally updates the old one to take account of the Lisbon Treaty. In particular, it seeks to improve the accountability of the Commission by setting up a Question Hour with Commissioners, including the Vice-President for External Relations/High-Representative for Foreign Affairs and Security Policy based on the existing Question Hour with the Commission President. It also provides that if Parliament asks the Commission President to withdraw confidence in an individual Member of the Commission, he will seriously consider whether he should request that Member to resign. The President shall either require the resignation of that Member or explain his refusal to do so before Parliament in the following part-session. The new Agreement also increases the involvement of Parliament in international negotiations and provides that the Commission will provide Parliament with immediate and full information at every stage of negotiations on international agreements and in particular those on trade matters and other negotiations involving the consent procedure. At international conferences, the Commission shall, in view of Parliament's extended powers under the Lisbon Treaty, at Parliament's request, act as facilitator in order to enable the chair of the EP delegation to be granted observer status in relevant meetings and guarantee access to EU facilities for Parliament's delegations.

Despite the European Parliament and the Commission paying lip service to transparency, open access to information and all that jazz, they don't feel that the reading public is fit to see the actual text of the new Agreement. Well, a search of their respective websites has proved vain. Fortunately, Council has published a more-or-less final version dated June 29, 2010, on its public register here.

But now the Council has registered a public protest about the new Framework Agreement and has written to the Parliament and Commission to voice its misgivings. The Council's Legal Service has published a thorough legal opinion on the matter in which it states that the text agreed by the European Parliament and Commission negotiators on June 29 2010 aims, on several points, to modify the balance between the Institutions that was established by the Treaties and according the Parliament powers which are not conferred upon it by the Treaties. The Legal Service recommends that the Council should, by statement published in the Official Journal, reserve the right to submit to the Court of Justice any act or action of the Parliament or the Commission which refers to the Agreement and would have an effect contrary to the interests of the Council and the prerogatives conferred upon it by the Treaties. The Council should in particular reject the provisions on international agreements, infringement proceedings against Member States and transmission of classified information to the European Parliament. The text of the protest and Legal Service Opinion is available here.

UPDATE: A reader kindly pointed us to the text of the new Framework agreement, available here on the European Parliament's website.

FURTHER UPDATE: The new Framework Agreement is now published in the OJ (OJ 2010 L 304, p. 47)

On 29 October, Carlo Magrassi, EDA's Deputy Chief Executive Strategies, delivered a speech at Defensys'10.

Keynote Address by Adam Sowa, Deputy Chief Executive of the European Defence Agency, at the ACT Industry Day, 5-6 October, Prague.

EDA held a Biological Equipment Development and Enhancement Programme symposium, hosted by the French Ministry of Defence, from 10 – 11 May 2010 in the Military School, Paris, France.

Wise Pen Team report on Maritime Surveillance (MARSUR)

EDA will be present at the Festival of Europe, on Saturday 8 May 2010.

EDA’s Chief Executive, Alexander Weis, delivered a speech at the “Défense et Stratégie” Conference on “L’Europe puissance navale”. During the third roundtable, dedicated to a powerful industry as a condition for a European naval power, Alexander Weis has expressed EDA’s views on the naval European Defence Technological and Industrial Base, underlining the efforts needed in this domain.

EDA announces the conclusion of Project STAMP

On 9 October 2009, the EDA Steering Board in National Armaments Directors formation approved “Guidelines for facilitating SMEs’ access to the defence market”.

The European Defence Agency’s (EDA) Member States France, Germany, Italy, Spain and Sweden (as lead nation) have signed a Project Arrangement on the MID-air Collision Avoidance System (MIDCAS) at the Paris Air Show on 17 June 2009

The European Defence Agency (EDA) signed the contract on the Studies for Integrated Multifunction Compact Lightweight Airborne Radars and Systems (SIMCLAIRS) on 31 March 2009, an ad-hoc category B project, with a consortium consisting of national industrial companies from three EDA participating Member States: France, Sweden and United Kingdom. The consortium consists of four European companies, all of which have already been successfully involved in past and present airborne radar and equipment development in Europe

European Union governments today endorsed a Capability Development Plan (CDP) defining the future military needs and priorities of European Security and Defence Policy (ESDP) and agreed to use it to guide future national defence investment decisions and to seek opportunities to collaborate so as to address their short-to-longer-term military requirements coherently

In the simplest terms, EDA is the “back office” for the European Security and Defence Policy – ESDP. Its task is to improve the military capabilities needed to carry out ESDP operations

The European Defence Agency welcomes the efforts of the European Commission to further support the development of a true European Defence Equipment Market (EDEM). The Defence Package published today is complementary to the Agency’s own agenda for creating a more effective EDEM and a stronger European Defence Technological and Industrial Base (EDTIB).

European Union Defence Ministers today welcomed a Long-Term Vision report from the European Defence Agency, designed to serve as a compass for defence planners as they develop the military capabilities the European Security and Defence Policy will require over the next twenty years in an increasingly challenging environment

Javier Solana, EU High Representative for Common Foreign and Security Policy, in his capacity as Head of the European Defence Agency (EDA), today announced the appointment of Mr. Lo Casteleijn as Chair for meetings of the Steering Board of the European Defence Agency when it meets at the level of National Defence Planners and Policy Directors responsible for Capabilities.