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Issue 18 - May 2013
This newsletter is published by SOMO and WEED.

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Summaries of the articles:

EU crisis - no light in the tunnel
EU parliamentFurther severing economic and social conditions in many Euro-zone countries due to austerity measures and zombie-banks, are resulting in political stagnation everywhere. The German elections due in September 2013 are also stalling major decisions about governance at EU level of banks, i.e. a full banking union, and EU country reforms and budgets.

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Finally a basic bank reform approved (CRD IV-CRR), but lacks key reforms
EU parliamentAfter years of debate, a first major EU legislation (CRD IV – CRR) to make banks less prone to crises, has been agreed almost five years after the financial crisis erupted. Full implementation is not expected before 2019. The new rules require banks to have more and better capital buffers but do not tackle major flaws in banking operations such as miscalculating risks and too much borrowing by the banks themselves. Moreover, many other bank reforms are still under way.

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Will the EU crack down on (its) tax havens?
EU parliament Since ‘offshore leaks’, the political momentum to crack down on tax havens has strengthened considerably. But as there has been such momentum before, particularly after the financial crisis, without any real change afterwards, one needs to be cautious of how serious politicians are with the solutions they announce. While some progress is visible on the exchange of information for individuals and on transparency for some companies, there are still many things that can be done and some decisions such as on country-by-country reporting have been insufficient. It is also not clear if a full ownership disclosure of companies, foundations and trusts in a public register will take place in the framework of the anti-money laundering directive.

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Brief updates:

Brief update: UK files lawsuit against FTT
EU parliamentWhile negotiations among eleven EU member states to establish the Financial Transaction Tax (FTT) through Enhanced Cooperation (‘coalition of the willing’) have started, resistance both of the finance industry and some member countries is continuing. The UK has filed a lawsuit at the European Court of Justice. London says that the FTT would have extraterritorial effects and incur costs in non participating countries. This would run against the treaties. Sources near to the German finance ministry don’t see prospects of success for the British attempt. Claimed problems regarding extraterritoriality are contested since the EU draft follows very much the British stamp duty, which is taxing the purchase of British stocks also outside the country. (See the previous newsletter.) Another resistance might arise from the ECB which has offered to assist with redrafting the FTT in order to prevent harmful effects on market stability, as they put it.
 

Brief update: Financial instruments reform stuck in the Council
EU parliamentThe revision of the Markets in Financial Instruments Directive (MiFID II-MiFIR) (for an overview see October 2012 Newsletter), covering amongst others high frequency trading and commodity speculation, is still stuck in the Council. While the dossier was moved from the working group level to the second stage of the permanent representative (‘COREPER’), the contentious issues are still unsolved. The main problem is still to agree on the access to clearing houses. However, it is still possible that the COREPER will find a solution and the 21 June meeting of the finance ministers (ECOFIN) could decide about the Council’s position. After that, the Council and the European Parliament have to find a compromise to their differing positions. For an overview on current loopholes in the MiFID drafts see this April 2013 NGO briefing paper.
 

Calendar
For background to the official agenda of European institutions, see the following websites: The links below give the website with updates and overviews of documents and dates related to the EU decision making process

May
June

July

September
  • 2-5, G20 (St. Petersburg): Finance Ministers' Deputies meet           
  • 5, ECON (Brussels): Meeting
  • 5-6, G20 (St. Petersburg): Leaders' Summit chaired by Russia
  • 16-17, ECON (Brussels): Meeting
  • 23-24, ECON (Brussels): Meeting
  • 30, ECON (Brussels): Meeting

October

November
  • 4-5, ECON (Brussels): Meeting
  • 25-26, ECON (Brussels): Meeting

December
  • 2, ECON (Brussels): Meeting
  • 5, ECON (Brussels): Meeting
  • 16-17, ECON (Brussels): Meeting
  • 19, European Council (Brussels): Two-day Summit of heads of state