Belgium begs London to OK EU watchdogs
EU presidency holder Belgium has intervened in a row about new European financial watchdogs in an attempt to avert a breakdown in talks to set up new supervisors by the start of next year, a senior diplomat said.
Last weekend the country’s finance minister Didier Reynders contacted his British, German and French counterparts, asking them to back a compromise and end an impasse that threatens to derail plans for the watchdogs.
Setting up supervisors to keep tabs on banks, insurers and financial markets is central to Brussels’ efforts to prevent another economic crisis.
But the plan is contentious with Britain, which does not want super-watchdogs that could overrule national regulators in Europe’s largest financial market.
The Belgians wanted countries such as Germany and Britain to agree to give the new EU regulators the final say ahead of a showdown between country representatives and the European Parliament last night.
Diplomats fear that the meeting, when parliament will again lay down demands for giving the regulators more clout, could deepen discord and make it impossible to set up the watchdogs for the self-imposed deadline of the start of 2011.
“Some people in parliament feel they have been ignored,” said the diplomat. “There are some who want a fight. The Belgians have taken it to the top because they have to.”
At the heart of the disagreement is whether the watchdogs get powers to overrule
individual member states.
The European parliament, worried the new authorities will lack the teeth to enforce rules, wants them to be able to instruct local regulators on what to do in an emergency or bypass them and go straight to bank boardrooms. Lawmakers also want the watchdogs to have the power temporarily to ban short selling of financial instruments.