I’ll believe this when it happens. If Brown doesn’t make threatening noises about the EU budget, or resigning pronto and holding an election, they’ll just ignore his protests and outvote him. Then we’d be sunk.
Christina Speight
GUARDIAN 17.6.09 @16:01
Gordon Brown to resist EU attempts to control Britain's financial sector
• Brussels summit to address proposals for new EU 'financial architecture'
• Majority of EU countries favour mechanism allowing EU regulators to overrule national governments
Gordon Brown is to resist European attempts to exert greater controls over the City of London, the British financial sector and, possibly, national fiscal powers at a Brussels summit tomorrow.
With the other big European states backing moves to tackle the financial crisis by establishing a new system of pan-European regulators and supervisors, with last-resort authority to dictate bank bailout orders to national governments, the prime minister is expected to argue that Britain is different because of the City's pre-eminence as the EU's biggest financial centre.
The two-day summit will be dominated by proposals for a new European "financial architecture" in response to the crisis.
The European commission and several of the key member states want laws enacted later this year creating a two-tier regime of financial regulation, supervision and risk monitoring.
While the Brown government broadly supports the proposals tabled by the European commission, it insists Britain will be disproportionately affected because of the bigger role that the City plays in the British economy and because of the presence of hundreds of foreign banks in London.
Brown is short of allies, supported vocally only by Romania, Slovenia, and Slovakia among the EU-27. He could be outvoted if the summit, improbably, decided to forego consensus and push ahead with the new rules.
France and Germany have repeatedly blasted "Anglo-Saxon" capitalism as the source of the financial meltdown and may be relishing the rare chance supplied by the crisis to tame City excesses.["Anglo-Saxon" capitalism is proving more resilient than the continental bureaucratic version -cs]
They also see the Brown government as weak and sense a Conservative government under David Cameron could refuse to be part of the new European system.
The two-tier regime comprises a European Systemic Risk Council, made up of central bankers and officials charged with "macro-prudential" oversight and risk management to try to ensure financial stability across the EU.
In a speech on Tuesday, José Manuel Barroso, the commission president, said the council would be chaired by the president of the European Central Bank, which runs the euro single currency. Brown opposes this and wants the council chair either rotated among eurozone and non-eurozone central bankers or elected for fixed terms.
The second tier is the European System of Financial Supervisors, regulating the banking, insurance, and securities sectors. The proposal leaves national regulators in charge of routine operations. But in a dispute over, say, a cross-border bank between two national authorities, the European body is empowered to mediate and, if need be, impose a settlement. That could mean a government ordered to use tax revenue to bail out a bank, usurping traditional fiscal powers at the national level.
Britain is strongly opposed and last week won a concession from EU finance ministers stating that the new regime could not "impinge on national fiscal responsibilities of member states".
This explicit pledge, however, is missing from the draft statement prepared for tomorrow's summit and even if it is revived, it is not clear how it would work.
Barroso said yesterday that "an overwhelming majority" of EU countries "favoured a binding dispute settlement mechanism", enabling the European regulator to overrule national governments.
The new regime would "combine certain centralised responsibilities at European level, while maintaining a clear role for those who are closest to the day-to-day operation of companies," said Barroso.
The government insists that if taxpayers of one country are saddled with liability for bailing out failing banks, the decision-taking powers must also lie at the national level.
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