Global General

EU leaders to reassess regulation of financial services

By Fu Jing and Ai Yang (China Daily)
Updated: 2010-10-29 08:08

BRUSSELS / BEIJING - European Union (EU) leaders said they are going to "take stock of progress" on the regulation of lax EU financial services, which helped worsen the global financial crisis after it originated in the United States, during a two-day summit that started on Thursday.

The leaders will endorse the report of the Task Force on Economic Governance, chaired by the President of the European Council Herman Van Rompuy. The task force has presented several proposals to increase fiscal discipline and strengthen economic surveillance.

They will also determine the EU's position at forthcoming meetings with international partners - namely, at the G20 meeting in November in Seoul, the Cancun conference on climate change in November and summits with the US, Russia and Ukraine.

The European Council will define the EU's core political messages for the summit to be held with the US on Nov 20.

On Wednesday, Brussels promised to complete its push for financial regulation reforms - which originated in the US financial crisis and the European public debt turmoil - by the end of 2011.

The task is among the strategic priorities adopted by the European Commission for 2011. The commission said the EU has shown a readiness and ability to meet adversity and tackle the unprecedented challenges of the financial and economic crisis in 2010.

"The task now at hand is to ensure that recovery is sustained," said the commission in the 12-page report on next year's strategic priorities.

Related readings:  China, Eu join hands  China, EU focus on governance and technology  EU-China social security meeting kicked off  EU struggles for more oversight

European Commission President Jose Manuel Barroso said: "The European Union has proved equal to the challenges facing it, but we are not yet out of the woods. Our policies need to reflect our ongoing commitment to creating sustainable growth and jobs."

However, that commitment will be a challenging one, said Mei Zhaorong, the former Chinese ambassador to Germany.

"It certainly will take a very long time for Europe to recover financially as a whole and provide more jobs. At the moment, only a few countries like Germany are doing well financially - but in southern Europe like France, there still exists quite some social instability due to budget cuts, which cannot be solved overnight," the ambassador told China Daily.

Barroso delivered the President's State of the Union Address in early September 2010, initiating an open debate in which EU institutions could discuss the priorities of the union for next year.

The priority report, announced on Wednesday afternoon, he said, has taken into full account these fruitful discussions, and translated the commission's vision into concrete actions for 2011.

Aiming to complete the ambitious reform of its financial sector next year, he noted, the EU will provide a legislative framework for bank crisis management, proposals to reinforce the protection of consumers of financial services and a regulation on credit rating agencies.

In addition, he said, the EU will beef up new fiscal enforcement mechanisms, proposals to support the competitiveness of EU enterprises and legislative initiatives on posting of workers and working time to restore sustained economic growth.

The EU has also pledged to pursue the citizens' agenda to ensure their rights, freedoms and justice as EU citizens, Barroso said.

Meanwhile, he noted, Europe will pull its weight on the global stage in 2011 by supporting the new European External Action Service (EEAS) projecting the 2020 growth objectives on the external scene while continuing to improve the EU's development assistance to target those most in need.

Mei said the biggest question for the EEAS now is whose interest the organization truly represents. "Can the service resolve actual problems? Disparity in development is obvious within the EU," Mei said, adding that the ultimate power of the bloc remains in the hands of the few stronger countries.

"The foreign chief Catherine Ashton is British, the new ambassador to China Markus Ederer is German. The French will say, what about us? There will be a lot of competition for posts within the EEAS from different countries, all bearing their own ideas in mind," Mei said.

Mei added that Brussels' new strategy also means more frequent economic cooperation with China in the coming years. "On one hand Europe will need China financially, on the other hand it will still take quite some time for it to willingly accept that China's growth is a fact. Both sides have to learn to cooperate with differences aside."