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Economic and Financial Committee

Economic and Financial Committee

Outline of the Community (European Union) legislation about Economic and Financial Committee

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Institutional and economic framework of the euro

Economic and Financial Committee

Acts

Council Decision 98/743/EC of 21 December 1998 on the detailed provisions concerning the composition of the Economic and Financial Committee.
Council Decision 1999/8/EC of 31 December 1998 adopting the Statutes of the Economic and Financial [See amending acts].

Summary

The Maastricht Treaty provides for an economic and financial committee to be set up at the start of the third stage of Economic and Monetary Union (EMU), which began on 1 January 1999.

Composition and tasks of the Economic and Financial Committee

The Council is to adopt detailed provisions concerning the composition of the Committee, bearing in mind that the Member States, the Commission and the European Central Bank (ECB), are each to appoint two members of the Committee. They may also appoint two alternate members.

Under Article 114 (2) and (4) of the Treaty establishing the European Community (EC Treaty), the Committee’s tasks are:

  • to keep under review the economic and financial situation of the Member States and the Community and to report regularly to the Council and the Commission on this subject, in particular on financial relations with third countries and international institutions;
  • to contribute to the preparation of the work of the Council, particularly as regards recommendations required as part of multilateral surveillance (Article 99) and decisions required as part of the excessive deficit procedure (Article 101).

The Committee may also prepare the Council’s reviews of the exchange rate of the euro (Article 207). It may be consulted in the procedure leading to decisions relating to the exchange-rate mechanism of the third stage of Economic and Monetary Union (ERM II), and may provide the framework for the dialogue between the Council and the ECB at the level of senior officials from ministries, national central banks, the Commission and the ECB.

Given the importance of those tasks, it is essential that members of the Committee and alternate members be selected from among experts possessing outstanding competence in the economic and financial field. The two members appointed by each Member State must be selected from among senior officials from the administration (ministerial level) and the national central bank.

Adapting the Economic and Financial Committee in the light of EU enlargement

With a view to the enlargement of the EU on 1 May 2004, the statutes of the Economic and Financial Committee were amended in 2003. A new Article 4 was inserted, which provides for the Committee to meet in two different configurations:

  • either with the members selected from the administrations, the national central banks, the Commission and the ECB;
  • or with the members from administrations, the Commission and the ECB.

The Committee in its full composition will regularly review the list of the issues on which the national central bank members are expected to attend the meetings. This measure is necessary in order to ensure that the expertise and analytical insight of the national central banks are available to the Committee without its work being hampered by too many participants.

Taking decisions on a majority basis

If a vote is requested, decisions are to be adopted by a majority of the members but, in the case of questions on which the “Economic and Financial Affairs” Council (Ecofin Council) may subsequently take a decision, members from national central banks and the Commission will not participate in the vote. The Committee will also report on minority or dissenting views expressed in the course of the discussion. A member who is unable to attend a meeting of the Committee may delegate his/her right to vote to one of the alternates or another member.

The Committee has a President elected by a majority of its members. The two-year term of office is renewable. The President represents the Committee, including in its relations with the European Parliament. The President’s voting right is delegated to his/her alternate and, if indisposed, the President is replaced by the Vice-President of the Committee.

Where alternates replace members, they have the right to vote. As a general rule, alternate members may attend committee meetings, but do not vote or participate in discussions. The Committee may decide to amend this.

The Committee is convened at the initiative of the President, or at the request of the Commission, the Council or four of its members.

Committee deliberations are confidential.

The Committee may entrust the study of specific questions to its alternate members, to subcommittees or to working parties. It is also assisted by a secretariat.

References

Act Entry into force and expiry date Deadline for transposition in the Member States Official Journal
Decision 98/743/EC 1.1.1999 OJ L 358, 31.12.1998
Decision 1999/8/EC 1.1.1999 OJ L 5, 9.1.1999
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Decision 2003/476/EC 01.07.2003 OJ L 158, 27.6.2003

European financial supervision

European financial supervision

Outline of the Community (European Union) legislation about European financial supervision

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

European financial supervision

Document or Iniciative

Communication from the Commission of 27 May 2009 – European financial supervision [COM(2009) 252 final – Not published in the Official Journal].

Summary

This Communication sets out the basic architecture for a new European financial supervisory framework. The European Commission proposes that this framework be composed of two new pillars:

  • the European Systemic Risk Council (ESRC);
  • the European System of Financial Supervisors (ESFS).

The European Systemic Risk Council (ESRC)

The financial crisis revealed the shortcomings of a system that was lacking in macro-financial supervision. Under the new system, it is essential to be able to identify risks to stability and to introduce an effective warning system. The current macro-prudential measure is too fragmented. It should be developed further.

The ESRC should be an independent body, responsible for safeguarding financial stability in the area of macro-prudential supervision at European level. It will not have any legally binding powers and shall be responsible for the following tasks:

  • collecting information and identifying potential threats;
  • prioritising risks according to their significance;
  • issuing warnings where applicable;
  • making recommendations if required;
  • monitoring the measures that are taken;
  • cooperating with the IMF, the FSB and third country counterparts.

Macro-prudential supervision will mainly be carried out by central banks. In this regard, the Commission proposes that the ESRC be composed of:

  • the President of the European Central Bank (ECB), responsible for the presidency of the ESRC;
  • a Vice-President (elected by the members of the ESRC);
  • the central bank governors from the 27 Member States;
  • the Vice-President of the ECB;
  • the Chairpersons from the three European supervisory authorities;
  • a member of the European Commission.

Each national central bank governor shall be accompanied by a representative of the national supervisory authorities, admitted as observers.

It is planned that the ESRC shall form part of the European legal and institutional framework. The Commission proposes that the ESRC should be established on the basis of Article 95 of the EC Treaty as a body without legal personality.

The European System of Financial Supervisors (ESFS)

The ESFS corresponds to a micro-prudential approach. Its duties are to set up a system which is in line with the objective of a stable and single market for financial services in the European Union. It will also be responsible for linking national supervisors into a strong Community network.

The ESFS shall form an operational European network. The three Committees of Supervisors are to be replaced by the following authorities, having a legal personality:

  • the European Banking Authority (EBA);
  • the European Insurance and Occupational Pensions Authority (EIOPA);
  • the European Securities Authority (ESA).

These three authorities shall:

  • establish a single set of harmonised rules;
  • ensure consistent application of EU rules;
  • manage disagreement between national supervisors;
  • make recommendations if there is a manifest breach of Community law;
  • create a common supervisory culture and consistent supervisory practices;
  • have full supervisory powers for some specific entities;
  • ensure a coordinated response in crisis situations;
  • collect micro-prudential information.

The ESFS shall be composed of:

  • the three supervisory authorities described above;
  • a steering committee;
  • national supervisory authorities.

With the establishment of the ESFS, and the three European Supervisory Authorities described above, the Commission intends to introduce a “single rule book” which will ensure uniform application of rules in the EU in order to safeguard the effective functioning of the internal market.

The ESFS is to be established on the basis of Article 95 of the EC Treaty.

Context

The October 2008 financial crisis revealed many shortcomings in financial supervision. As a response to this crisis, the Commission mandated a group chaired by Mr Larosière to propose recommendations in order to strengthen European supervisory arrangements. The Larosière Group thus presented a report on 25 February 2009 introducing a new system, which is set out in this Communication.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

European Transparency Initiative

European Transparency Initiative

Outline of the Community (European Union) legislation about European Transparency Initiative

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Institutional affairs > The decision-making process and the work of the institutions

European Transparency Initiative (ETI)

Document or Iniciative

Communication from the Commission of 21 March 2007 – Follow-up to the Green Paper ‘European Transparency Initiative’ [COM(2007) 127 final – Not published in the Official Journal].

Summary

This Communication follows up on the Green Paper of 3 May 2006 on the “European Transparency Initiative” (ETI). It responds to the arguments put forth by participants in the consultation (results in the Commission staff working document SEC(2007) 360) and provides measures the Commission intends to take.

Interest representation * (lobbying)

The respondents to the consultation were critical of the negative connotation of the term “lobbying”. The Commission however stresses that the definition does not include any negative value judgement and that lobbying activities are imperative from a democratic point of view. Nevertheless, the register proposed in the Green Paper will be entitled “Register of Interest Representatives”.

The establishment of this Register as a voluntary one received much support. Yet many felt that only a compulsory register would guarantee full transparency. Regardless, the Commission will pursue a voluntary and incentive-based approach in order to cover more comprehensively the European interest representatives. To strengthen the incentive to register, the Commission will combine the Register with a standard template for Internet consultations. Those participating in a consultation will be systematically invited to register. They will have to provide information on the interests they represent, their mission, and how they are funded.

The Green Paper indicated that registered interest representatives* (lobbyists) will need to subscribe to a Code of Conduct. However, the consultation did not address the development or monitoring of such a code in detail. It considered that the responsibility of developing such a code would fall to the interest representatives. But respondents concluded that this would be difficult to carry out in practice. Hence, the Commission will instead review and update the minimum requirements adopted in 1992.

The inter-institutional approach, by which at least the Commission and the European Parliament would have a shared Register and Code of Conduct, received much support from the respondents. The Commission is also in favour of this option, believing it to provide yet another incentive to register. Consequently, it calls on the other institutions to consider this possibility more thoroughly.

Discussions on the Code of Conduct will begin before summer 2007. The Register for Interest Representatives will be launched in spring 2008. The Commission will review the functioning of this Register in spring 2009.

Consultation standards

The Commission’s consultation standards received rather positive feedback from the respondents. Nevertheless, certain weaknesses were indicated, such as the provision of feedback on the impact of and the observance of the eight-week time limit for the consultations, as well as the balancing of targeted consultations between the relevant stakeholders. To improve the quality of the consultations, the Commission plans to reinforce the application of the consultation standards with a coordinated approach, assuring that a plurality of views are expressed, and by providing better feedback.

Publication of beneficiaries of EU funds

Following the publication of the Green Paper, the Commission initiated discussions on the publication of information relating to the beneficiaries of EU funds with the Member States, the European Parliament and a wide range of stakeholders. These discussions led to a consensus regarding the publishing of relevant data. Consequently, this has been included into the Financial Regulation.

Apart from the legislative changes, certain practical steps must also be taken. The respondents to the consultation indicated their desire for a searchable and centralised database containing information regarding the beneficiaries of the funds that would be managed by the Commission. However, data collection and publishing remains the responsibility of the implementing bodies in Member States. In order to start publishing relevant data as of 2008, the following steps will be taken in collaboration with the European Data Protection Supervisor:

  • publishing of data in its current form, by the Member States through the provision of access to data for the public via, for example, national websites, and by the Commission through the establishment of a central website providing links to national websites and the website on EU funds;
  • assuring that data is comparable and searchable, by the Commission through the provision of a common standard for publishing data (to be proposed in autumn 2007).
Key terms used in the act
  • Interest representation (lobbying): all activities carried out with the objective of influencing the policy formulation and decision-making processes of the European institutions.
  • Interest representatives (lobbyists): persons carrying out lobbying and who work in organisations such as public affairs consultancies, law firms, NGOs, think-tanks or trade associations.

Related Acts

 on the establishment of a transparency register for organisations and self-employed individuals engaged in EU policy-making and policy implementation [OJ L 191, 22.7.2011].

Commission Communication of 27 May 2008 – European Transparency Initiative – A framework for relations with interest representatives (Register and Code of Conduct) [COM(2008) 323 final – Not published in the Official Journal].