Despite fears that the Czech Republic and other eastern member states could oppose the anti-crisis plan decided by the bigger EU economies (EurActiv 13/10/08), the European Council managed to find common ground on the response to the financial turmoil.
"Europe all together, without exceptions, approved the measures adopted in Paris," stated Nicolas Sarkozy, French president and holder of the rotating EU presidency, during the press conference that closed the summit's first day.
After having reached agreement on the most urgent questions, leaders could focus on longer-term issues including global economic governance and supervision of international financial groups. "We cannot accept that the same causes will provoke the same effects in the future," stressed Sarkozy, invoking a new 'Bretton Woods' along the same lines as the proposals launched earlier by UK Prime Minister Gordon Brown (EurActiv 15/10/08).
Any "refoundation of capitalism" should be based on more transparency and supervision of all institutions "with no exceptions", said Sarkozy, citing the anomaly of hedge funds. By the end of the year, the European Commission will present its response to a European Parliament request for stricter regulation of private equity and hedge funds. However, it remains unclear whether Brussels will support the most critical views of speculation (EurActiv 22/09/08).
The crisis also offered many EU countries the chance to relaunch the idea of a unique European supervisor for cross-border financial groups, which hold two-thirds of EU bank assets. But there was strong opposition to the idea and eventually the Council agreed to increase cooperation between national supervisors instead. It is not clear whether this will be based on more integrated group supervision or on cumbersome collegial supervision. However, the latest draft conclusions of the summit mention the establishment of a "financial crisis cell" to allow the bloc to react more quickly to possible future turmoil.
Yesterday (15 October), the Commission pushed forward a review of EU accounting rules to eliminate the mismatch between US and European financial institutions, a move backed by leaders. Moreover, Brussels proposed to lift guarantee schemes for bank deposits across Europe to 100,000 euros within a year. They currently stand at 20,000 euros.
