EU Sure U.K. Concerns on ECB Oversight Law Can Be Addressed

The European Commission is confident that British concerns on a draft law to give the European Central Bank oversight powers over euro area banks can be solved quickly, commission spokeswoman Chantal Hughes said.

The U.K. last month invoked its right to put the bill, already approved by member states and the European Parliament, through a parliamentary scrutiny process, forcing the bloc to delay plans to formally adopt the law. Britain is now seeking guarantees that safeguards it won in talks on the draft law won’t be overturned.

“We are aware of the U.K. concerns,” Hughes, a spokeswoman for Michel Barnier, the EU’s financial-services chief, said by e-mail. “We’re confident we can sort any remaining issues in the next few days. A final agreement on the single supervisory mechanism is imperative. We cannot afford delay.”

EU leaders agreed last year that the ECB should be given oversight powers as a first step to building a banking union that would break the links between banks and sovereigns, and so boost confidence in the bloc’s financial system.

The British concerns center on voting procedures in the European Banking Authority, an EU agency that coordinates the work of national regulators across the bloc, according to three EU officials who can’t be named because the discussions aren’t public.

‘Building Blocks’

The U.K. seeks a guarantee that agreements on voting arrangements in the EBA, reached earlier this year, won’t be overturned, the officials said.

“We have consistently said that we support the creation of a euro-zone banking union, but we have also been clear that there need to be safeguards to ensure the integrity of the single market is guaranteed and that the rights of countries not taking part are protected,” said a U.K. government spokesman who can’t be named in line with official policy.

“As the building blocks of European banking reform are put in place, we need to ensure we have a consistent approach which respects the integrity of the single market,” the official said.

The U.K. move, coupled with decisions by Britain to seek to overturn some EU financial regulation measures in the bloc’s courts, puts the country in a position where it risks “losing legitimacy” and influence, Sven Giegold, a lawmaker in the European Parliament said in a telephone interview.

The U.K. “got what it wanted” in negotiations on the supervisor law, Giegold said, adding that the new U.K. move was a unjustified attempt to tie the EU’s hands. The British “are basing their influence on the EU Court of Justice and blackmail,” he said.

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