Back-to-back crises have limited the power of the public purse, so policymakers are hoping professional financiers and savers can do the heavy lifting by putting their money to work in the right places. EU citizens alone have €11 trillion of cash savings sitting in their bank accounts.
But vying interests from within the industry and national governments, such as Ireland and Luxembourg, threaten to derail negotiations. That’s convinced the E6 group to agree on the fundamentals among themselves to speed the process along, triggering fears of a two-speed Europe in which some countries are left behind.
“I don’t think a separate structure is feasible, because it would conflict with the prevailing perception in all member states today that fragmentation must stop,” Cyprus’ Finance Minister Makis Keravnos, who currently chairs Ecofin meetings, told POLITICO.
Devil in the detail
The broad strokes of the deal paper over internal divisions within the E6. While all six governments agree on upgrading the EU’s securities regulator into a supercop for the bloc, they disagree on how fast the process should happen.
The compromise among the six ministers is that the transfer of powers from national supervisors to the European Securities and Markets Authority (ESMA) is done in a phased approach, via a transition period that “should be appropriate and as short as possible.”
That leaves the exact timeframe up for discussion, on a topic where there are plenty of competing interests.