Member states push back against more Europe in financial markets; Ecofin rejects full powers for ESMA

Brussels – Member States reject direct and entirely EU-level supervision of financial markets. The Ecofin Council is putting the brakes on a central element of the Commission‘s competitiveness strategy proposal: the centralisation of European financial markets is not popular with virtually everyone. The idea that the European Securities and Markets Authority (ESMA) could replace national authorities in every respect is unpopular, and the debate on the issue has sparked an outcry, starting with Italy. 

“We believe in a pragmatic, gradual, and proportionate approach“, said the Minister for the Economy, Giancarlo Giorgetti, during the public session. In his view, “a more targeted perimeter of European supervision would be more appropriate than a generalised transfer,” which implies less Europe than what the Commission is calling for. What is needed, he argues, is “more European supervision where the added value is clear,” but looking ahead, “a clear model” is needed for how national and European supervision will operate. For Italy, the Treasury Minister insists, the need to “avoid duplication and additional costs” remains unchanged.

At the meeting of the Ministers of Economy and Finance, the Czech Republic’s position mirrors Italy’s, with the Minister of Finance, Alena Schillerová, explicitly calling for “limited” supervisory powers for ESMA, as, according to Prague, a complete transfer of powers is unthinkable. Austria, Belgium, Denmark, Malta, Luxembourg, Latvia, Lithuania, Poland, and Sweden share the same opinion. The line that seems to be emerging within the EU Council is that the role of the European Authority must therefore be limited, as Giorgetti requests, to the largest and cross-border entities, leaving smaller operators to the national authorities. Finland, too, is calling for “careful consideration” of the possibility of direct supervision, also of small financial operators. France is also cautious: “We agree to ESMA supervision, provided it is limited,” Bertrand Dumont, Director-General of the Treasury in Paris, stressed, calling for a “limited” transitional phase leading from the current system to European supervision. Spain said it was open to “more centralised supervision,” but the Secretary General of the Treasury, Paula Conthe Calvo, does not specify that she wants a system entirely controlled by Brussels. 

Then there is the group of cost-conscious ministers, who do not wish to spend money unnecessarily on duplication. This is the position expressed by the finance ministers of Belgium, Denmark, the Netherlands, Romania, Ireland, Latvia, and Poland, who are calling for measures to ensure that no money is wasted in this necessary reform of the European financial market framework.