Sven Giegold

Europolitics-Interview zur Bankenunion

“Best solution would be to create a new institution”

Interview with MEP Sven Giegold (Greens-EFA, Germany)

By Manon Malhère

The European Central Bank (ECB) should ensure control over the EU single supervisory mechanism (SSM) for a short time only, MEP Sven Giegold (Greens-EFA, Germany) told Europolitics, stressing that “the best solution would be to create a new institution”. Giegold is in charge of the text amending the regulation establishing the European Banking Authority (EBA) which, along with the draft regulation granting supervisory powers to the ECB, forms the package establishing the SSM (see separate article).

In your report you would give a stronger role to the European Banking Authority (EBA). What are the main changes compared with the Commission’s proposal ?

Firstly, contrary to the Commission’s proposal, the EBA should have the last say, which means that the ECB [European Central Bank] would have to conform to its decisions. The ECB has to be treated equally with any other supervisor and I reject the special treatment for the ECB.

Secondly, regarding the voting rights within the EBA, I am sceptical about the Commission’s proposal because it assumes that the two groups of states will be of equal size (the 17 member states of the eurozone and the others). If we manage to get as many countries as possible into the common system of the single supervisory mechanism (SSM), there may be 24 or 25 member states at the end. Under the Commission’s proposal, the two or three member states not in the SMM would then have a de facto veto right. So we need to keep flexibility here.

Do you think that the UK would agree to that?

The UK is in a difficult position. Obviously, they see the need for a banking union within the eurozone and it is difficult for them to block the development of this project. Their economy depends strongly on it. But they cannot be happy if the new banking supervisor or the EBA get too much power. The City of London is way too important for the UK economy. The UK is quite silent and the tone of its representatives is surprisingly careful within the ECON committee. Normally, the British are among the loudest and here they are quite silent – which is also pleasant.

Don’t you think that granting enhanced powers to the EBA would go against the case law of the EU Court of Justice – the Meroni ruling?

The interpretation of the Meroni ruling is extremely conservative and it is often driven by political interests rather than by analytical substance. To recall, with the Meroni ruling (1950s), the ECJ did not allow the Commission to give powers to an agency. Here we are talking about a different situation: it is the co-legislators who grant enhanced powers to an agency under democratic responsibility. The modern interpretation of the Meroni ruling does not exclude giving stronger powers to an agency as long as it is democratically controlled and the decision is taken in a democratic way. As for the equal treatment of the noneurozone member states opting into SSM within the ECB – this issue will be rather difficult to solve… We should keep in mind that the problem will be triggered only if we grant powers to the ECB. The treaty foresees very clearly the decision structure in the ECB for all cases. Basically, it is always the ECB’s Governing Council – which is made up exclusively of eurozone members – that takes the decision. The decisions taken by the ECB’s future supervisory board would be validated by the Governing Council. Obviously, that is very problematic for the non-eurozone member states opting into the SSM.

Therefore we urgently need a legal solution to treat them equally, to give them the same rights. If that is not possible, the SSM has to be put on another basis, preferably Article 352 TFEU.

Does this mean that a new institution needs to be created?

My report is built on a double logic: the best solution would be not to give powers to the ECB, but to create a new institution on the basis of Article 352 TFEU. That would solve the Meroni ruling issue without any doubt. Also, this institution would allow for an equal treatment of all the countries that want to share sovereignty. But I am very open to following the line of the Commission if countries such as Poland and others agree to a flexible compromise. This solution should, however, apply for a limited period only because some basic contradictions can’t be solved. One of them is that the ECB will not be able to supervise the insurance sector, which is a major concern especially when it comes to the supervision of the conglomerates. It is not allowed by Article 127(6) TFEU.

How would you describe your cooperation with Marianne Thyssen (EPP, Belgium), who is in charge of the report on the ECB?

The key point of convergence is the need for a strong democratic control of the supervisor and strong EP rights. The strengthening of the position of the opt-in countries is clearly something we both have suggested. We disagree on whether or not we should stick to the basic approach: the ECB should take over the SSM, full stop. As I said, this solution should apply for a limited period only.

Have you received strong support from MEPs so far?

Yes, the amendments to my report show different positions, but you can also see a sizable amount of support in my direction. But you need to keep in mind that when they write their amendments, MEPs have different situations in mind. Some of them think only about the eurozone, while others also factor in the non-eurozone countries that will join later. The two largest groups in the EP (EPP and S&D) are totally split internally on this issue: here, national interests play a strong role.

Europolitics, Thursday 15 November 2012

Category: Uncategorized

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