Eurocrash: the march to a banking union
Wednesday 12 September 2012
Had the Karlsruhe judgement gone the other way, it would have been important. But, as widely anticipated, it has largely confirmed the status quo. And while the small print may have some implications for the future, the "colleagues" have lived to fight another day.
That clears the way for the longer term, the eventual destination being a new treaty. But an essential stepping stone to the new "federation of nation states" that Barroso says he wants is a full banking union. And an important precursor to that are "new ECB powers for banking supervision".And today is the big day when the commission unveils its proposals. These start with a press release, moving on to a Communication and thence to a proposal for a regulation establishing a European Supervisory Authority (European Banking Authority) and another proposal on the prudential supervision of credit institutions. On top of that, there is a dedicated website on financial supervision, with multiple links, including one to "frequently asked questions". And buried in all this, but far from explicitly stated, are Basel III requirements, which were going to happen anyway, some of which have absorbed into the new initiative. However, with hundreds of pages of dense technical detail and only hours after publication, it would be fatuous to suggest that we are anywhere near absorbing the finer points of the proposals. Thus, the lurid tales of London banks being shut down by Brussels, or forced into taxpayer-funded bail-outs, are somewhat wide of the mark. One should also note in this context that the proposal to extend the functions of the ECB comes under Article 127(6) of the TFEU, which requires unanimous approval of all 27 member states.
Using this as leverage, the UK has plenty of scope to block the proposals - if wishes to do so, or is forced to do so by parliament. And nor are we on our own in having concerns. The Germans have already expressed grave reservations about the commission proposals.
Nevertheless, the EU commission wants to put this issue to bed by the December European Council, with Barroso stating that he wants the ECB to make its first moves by 1 January 2013, with central supervision of all eurozone banks in place by 1 January 2014. This has all the hallmarks of the commission trying to railroad member states, and Barroso might find he encounters stiff resistance, not least from Germany. Schäuble, while welcoming the proposals in principle, is calling for a realistic timetable, stating that, "quality has to come before speed". The fun, it would seem, is only just about to start. COMMENT THREAD Richard North 12/09/2012 |
Eurocrash: countdown to treaty
Wednesday 12 September 2012
 I am still reading the speech and absorbing the details. But there can be no doubt now, no doubt at all. We are on our way to a new EU treaty. The "money quote" is as follows: Today, I call for a federation of nation states. Not a superstate. A democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty in a way that each country and each citizen are better equipped to control their own destiny. This is about the Union with the Member States, not against the Member States. In the age of globalisation pooled sovereignty means more power, not less. And, I said it on purpose a federation of nation states because in these turbulent times these times of anxiety, we should not leave the defence of the nation just to the nationalists and populists. I believe in a Europe where people are proud of their nations but also proud to be European and proud of our European values. Creating this federation of nation states will ultimately require a new Treaty."Our citizens and the new world order need an active and influential Europe", he says, and he means to get it. The commission, he promises, will present explicit proposals for the necessary treaty changes ahead of the next EU parliamentary election in 2014, "including elements for reinforced democracy and accountability". Now we are beginning to see the emergence of a specific timetable. That referendum we have wanted for so long just took a lurch closer. COMMENT THREAD Richard North 12/09/2012 |
Eurocrash: anti-climax time
Wednesday 12 September 2012
At nine our time, plus one minute, the Bundesverfassungsgericht started to report. According toFAZ, "yes … but" was the expected response. The devil is in the detail in what is an 85-page judgement.
Now, to keep us entertained, we also have the Dutch general election, the COM final on banking supervision and Barroso's "state of the union" address, and traditionally the most important German parliamentary debate of the year, the general debate on the budget. Angela Merkel will be speaking.And, as very much expected, it is a fudge. When ratifying the Treaties, the court says, the government must ensure that liability is limited to €190 billion. Any additional payments into the ESM may be possible only with the consent of the Bundestag. Barroso gets in first, with his speech to the EU parliament. The European Central Bank should take a core role in supervising all banks in the euro zone, he says, outlining what he says is a "quantum leap" in the move towards a banking union. However, the legislative proposals for a single European supervisory mechanism are not expected until this afternoon. In the interim, there has been some hyperventilation in the British media, but this is speculative comment based on leaked early drafts. We will have to wait until we see the text before we can judge. A busy day. COMMENT THREAD Richard North 12/09/2012 |
Defence: a worrying development
Wednesday 12 September 2012
 Nonetheless, we would not be entirely alone in worrying a little about the maudlin sentimentality of the official eulogies which magnify the significance of each death almost to the point where the loss of an entire army could not be a greater tragedy. This trend is unfortunately manifest with the death of Sergeant Lee Paul Davidson of the Light Dragoons, killed in Afghanistan on Sunday 9 September 2012 after his vehicle was hit by an improvised explosive device. Official details, as usual, have been repeated by press agencies and our state broadcaster, and multiple newspapers, not least the Evening Standard. This plumbs the depths of the Dianafication process, offering a "tribute to husband" from the "pregnant wife", with a degree of intimacy which, although touching, is perhaps best kept private. What makes this death different though, is a detail not always given in official bulletins and sometimes quite deliberately withheld because of the political sensitivity – the type of vehicle involved. But in this case, there can be no concern that the media will pillory ministers for another case of inadequate equipment. The vehicle involved is a Ridgeback (type illustrated above - lead vehicle), a 4x4 version of the famed Mastiff, and one of the best-protected vehicles in theatre. To my knowledge, this is the very first public report of a soldier being killed in such a vehicle, which has justly earned a reputation for impregnability, having saved the lives of countless numbers of soldiers. That, on the face of it, the Taliban should have found a means of breaching this vehicle is, therefore, a matter of considerable concern and a very significant development, even if none of the media reports seems to be aware of that. Very little detail is given of the incident, other than Sgt Davidson was the vehicle commander, and that his was the last in a convoy. But even these details add to the worry. As commander, he was most likely fully inside the vehicles, unlike the gunner, who is partially exposed. Then, as the last vehicle, we might assume a possible degree of sophistication in the targeting. One hopes, nevertheless, that this was one of those sad, random events, and that Sgt Davidson was an unfortunate casualty of war. But if it is the case that the Taliban have got the measure of these vehicles, then nothing in theatre is safe. Such a situation would be a very worrying development. COMMENT THREAD Richard North 12/09/2012 |
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