EUROPEAN DIARY:This week's talks on EU financial regulations put paid to any illusion that the Lisbon Treaty heralded a new era of transparency, writes ARTHUR BEESLEY
THE LISBON Treaty obliges EU ministers to meet in public when deliberating and voting on European legislation.
So did the treaty’s entry into force a week ago herald a new era of transparency? Not quite.
There were fireworks over Lisbon on Tuesday to mark the treaty’s enactment, an important symbolic moment indeed.
The very next morning EU finance ministers met in Brussels to discuss a new pan-European system of financial regulation, crucial given the need to avert any repeat of the banking debacle. Within hours, any hope that the new treaty would bring the meat of their discussions into public glare was gone.
Negotiations were held in private for more than three hours, leading to a backroom compromise. When the discussion finally went public, observers saw ritualistic congratulation among ministers before the deal was declared to be done, with unanimous support, after about nine minutes.*
What went on in the private “deliberations” remains obscure.
The citizens who are footing the bill for the clean-up might have expected more. After all, the treaty makes the distinction between the public parts of council meetings, dealing with union legislative acts, and those to be held in private, dealing with non-legislative activities.
Swedish finance minister Anders Borg, who chaired the meeting, was able to conduct the negotiation in private by convening bilateral engagements to resolve British difficulties with the planned package.
This is routine in EU business. Because the council at large was not involved until the end, there was no obligation to broadcast the talks on the council’s website.
As financial regulation is a hot topic these days, it might have made for juicy viewing.
In normal times, the very mention of the subject would be enough to induce sleep in civilians who toil outside the world of banks and money. Now it has become a fevered battlefield.
Unfettered by borders, the financial system is ripe for EU regulation. However, defining the scope and depth of such oversight has proved controversial.
On one side stand the French (and most Europeans), arguing for a heavier hand to prevent financial excess souring again into disaster. On the other are the British, fearful that the mighty City of London could die or be diminished by over-regulation.
Thus there was potential for a political showdown when finance ministers gathered over breakfast last Wednesday. Indeed, discord before the meeting led some diplomats to speculate that the matter would be sent up the line for EU leaders to resolve.
London was already displeased at the appointment of a Frenchman Michel Barnier to lead the European Commission’s powerful internal markets division and tried to block his ascent. President Nicolas Sarkozy then twisted the knife by portraying Barnier’s selection as a setback for British interests.
Adding spice to the brew last Wednesday morning was a letter in the London Times from Alastair Darling in which Britain’s chancellor argued for the primacy of national regulators in the supervision of individual companies.
“Regulatory reform throughout the world is imperative, and Europe, home to the world’s largest single market in financial services, has a particular responsibility,” Darling wrote. “If we get it right, we have the potential to be the safest and strongest marketplace in the world, our regulatory framework a competitive advantage. Get it wrong and we risk losing business to less regulated jurisdictions. Nothing would be more self-defeating.”
Over coffee and croissants, Borg quickly concluded there was no point in proceeding with a full ministerial council without making a stab at a compromise.
Private talks followed involving the British, the Swedes and Charlie McCreevy, outgoing internal markets commissioner and chief sponsor of the Commission’s regulatory reform package. With French and German representatives intermittently called into the room, other ministers and their entourages were left to themselves.
Darling ultimately received the safeguards he sought, telling the public session that a pan-European regulatory reform package would have taken five or more years to negotiate in “normal circumstances”.
Contrary to the spirit of the Lisbon pact, however, the negotiation and any promises made within it remains secret.
If a full public session might have rivalled some of the dullest moments of Oireachtas Reportfor tedium, meeting the demand for transparency would have cast light on the process and could well have injected drama into an important debate.
Still, Borg probably decided that there was little chance of concluding a deal in public.
It may be wrong, therefore, to expect ringside seats at key European negotiations to come up too often. Harmony will always be broadcast, disharmony less so. It seems there will be plenty of bilateral “break-out” meetings in the years to come.
* The public sessions of the council meeting can be accessed at http://video.consilium.europa.eu/