Global Financial Strategy - ESA crisis 'over' as MEPs pass budget

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ESA crisis ‘over’ as MEPs pass budget

Thursday 16 December 2010 – by Will Henley

The European Commission has sought to reassure national authorities that the three new European Supervisory Authorities will begin operations as normal following a breakthrough in the Parliament over the EU’s 2011 budget.

After weeks of uncertainty, MEPs finally agreed a new EU package on Wednesday, ending fears that the European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority would be forced to operate on just 60 per cent of anticipated finances.

“As the budget has now been adopted, the ESAs will indeed be fully operational from a budget perspective from January,” a Commission spokeswoman said.

Former head of CESR Eddy Wymeersch had told GFS News last week that the new agencies could effectively be “closed for months and months” without an agreement on a new financial package.

Under the terms of the creation of the ESAs, 40 per cent of their €40m total financing was set to come from EU funds, with 60 per cent derived from member state contributions.

Related articles:

Trichet: Lack of ‘boldness’ in Council’s plans

Hopes rise for ESAs and EU budget deal

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Agencies in limbo as EP refuses to budge

MEPs blame USA for financial crisis

But with the European Council and Parliament failing to agree a new budget, the EU would have been forced to operate under the 2010 budget, which had committed no new funds to the ESAs.

The European Commission had conceded to GFS News that the budget chaos was likely to have knock-on effects on their ability to recruit permanent employees.

However, following the vote on Wednesday, Parliament President Jerzy Buzek said that negotiators had been able to agree “most of MEPs’ priorities”.

“We got a good deal,” Buzek said, claiming that it had obtained “important commitments” from the European Council and Commission on its involvement in long-term EU budget negotiations.

“This EU budget is very good news for the European Union and for its citizens.”

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