- EU financial-services chief tries to kick-start reform effort
- Lead EU parliament lawmaker sees little coming from letter
A push by the European Commission to kick-start a stalled bill intended to tackle too-big-to-fail banks will probably fail because of sharp divisions in the European Parliament, according to Gunnar Hoekmark, the assembly’s lead lawmaker on the issue.
Hoekmark said a letter written by commission Vice President Valdis Dombrovskis to parliament on the so-called bank structural reform was “quite undramatic.” Dombrovskis, who took over as EU financial-services chief in July, “wants to understand the difficulties, but the issue is blocked in parliament because the socialists don’t accept our compromise,” Hoekmark said. “That’s just the way it is. I can’t see how that can be changed.”
In addition, a lot of legislation has been put in place since the commission presented the plan in early 2014 that “more or less covers the same goal,” Hoekmark said.
The commission, the EU’s executive arm, proposed the bill as a way to boost financial stability by separating banks’ retail operations from riskier investment banking. The Council of the European Union, which represents national governments and forms one half of the bloc’s legislature, reached a negotiating position on the bill in June 2015. But parliament, the other half, has made little progress.
A proposal by Hoekmark was rejected by the Economic and Monetary Affairs Committee in May 2015. A tentative compromise subsequently brokered by Hoekmark collapsed later that year in the face of strong French-led opposition, leaving the committee fresh out of ideas and momentum on how to bridge the gap between the two main political groups, the center-right European People’s Party and the Progressive Alliance of Socialists and Democrats.
In his Sept. 13 letter to Hoekmark, obtained by Bloomberg, Dombrovskis said the commission remains committed to the bill.
“I am aware that the parliament is having difficulties finding a common agreement among the different political groups which would enable us to begin” the next round of negotiations, Dombrovskis wrote. “I wanted to express my willingness to meet with you and the entire negotiating team in order to move the BSR proposal forward.”
Hoekmark said he’d meet with Dombrovskis soon, but the search for a compromise has been a “long process” in parliament.
“We’ve tried a lot of things,” Hoekmark said. “I tried a lot in my compromise proposals to stretch out a hand to the socialists. But that’s not enough, and I think nothing will come out of this process.”
Politico reported on the Dombrovskis letter earlier on Thursday in its Morning Exchange.