Banks and budgets on Spanish agenda

Taxing is on the table:

Working together will help the EU overcome one of the most pressing challenges that Spain has identified: globalisation and the competitive threat from outside the EU. “If the crisis has taught us anything, it is the need for coordination to respond to the challenges of a globalised economy,” said Zapatero in December. “If within the Union we have a common market and a common currency, we must also have common economic governance.”

Tax is also a priority briefly mentioned in Spain’s programme. If the December European Council is anything to go by, the issue will continue to raise its head. Carbon taxes, financial transaction levies and penalties for excessive bank bonuses have all been put on the table, pushed most of all by UK Prime Minister Gordon Brown and French President Nicolas Sarkozy to make up for the more than one third of EU GDP that has gone into the banking sector since the start of the crisis. “The excesses of the financial sector were largely responsible for the crisis, revealing a clear lack of supervision. The Union must make definite progress in this area,” said Zapatero.

BANKS

Spain will certainly have much to do on the banking side. Measures on derivatives, capital requirements and responsible lending are all in the pipeline for 2010 – the Commission is currently consulting on possible legislation in all three areas. The EU executive also wants four new supervisory bodies to be up and running by the end of next year – a risk board to oversee the entire financial system and three sector-specific watchdogs for banks, stock markets and insurance. Finance ministers managed to thrash out an agreement on the supervisory package on 2 December, which contains a safeguard clause to protect national sovereignty, but MEPs have taken a tougher line and want to see more power concentrated at EU level.

The European Banking Federation told Europolitics: “It is important that the Spanish Presidency finalises the reform of the European financial supervisory architecture. Their main task will be to ensure that the Council reaches an agreement with the European Parliament on a common position as regards the new supervisory authorities.”

There is also the issue of hedge funds. It has been open season for critics of the Commission’s directive on alternative investment fund managers, most of whom see the draft as hastily put together. The Swedish Presidency tabled its final compromise on the dossier on 15 December, leaving four issues unresolved. It will be up to the Spanish to close the controversial clauses on depositaries, valuation, non-EU funds and remuneration.