Huhne: securities group ‘to lose powers after four years’

Date: 20/09/01

By Peter Chapman

MEP Chris Huhne has given details for the first time of the fledgling deal emerging from talks between deputies and Internal Market Commissioner Frits Bolkestein over the creation of rules designed to set a level playing field across EU financial markets.

The negotiations were sparked by fears that the European Parliament would be excluded from a committee of experts charged with fine-tuning the new legislation under the so-called 'comitology procedure' - which controls the operation of Union committees which have decision-making powers.

Huhne, an economist who sits on the economic and monetary affairs committee, said under the deal close to being approved, Parliament would win a "sunset clause where the powers of the securities committee would be removed after four years".

He claimed this would ensure the committee would take account of Parliament's views before then and work within its remit.

In the long run, MEPs would probably win extra powers of oversight, he believes. "The key element is a willingness for some movement from the Commission in preserving the status quo if Parliament does give power away," Huhne said.

It was crucial for MEPs to be able to raise a red flag if the powers being ceded to experts were badly used or fell short of the targets of the original legislation. "The Parliament needs some leverage," added Huhne, who was a leading financial journalist in the UK before winning his Parliamentary seat.

The comitology procedure is due to be reformed by the Intergovernmental Conference in 2004, when member states meet to discuss changes to the treaties which govern the powers of EU institutions.

Commission President Romano Prodi said reform of the comitology process was a priority in his recent white paper on governance. The committee system was one of the key recommendations of banker Alexandre Lamfalussy in his report on reforms to securities markets.

He called for the setting up of two committees - a powerful securities committee made up of national regulators and Commission officials, and another comprising national experts who would advise on specific aspects of financial legislation.

The former central banker said this would allow the EU to move faster towards its goal of setting-up a pan-European rule-book for markets by 2003.

Laws covered by the new approach include draft directives on prospectuses and market abuse.

Under the system, MEPs can table amendments to the texts of proposed legislation in the usual way but the committees would have final say over technical details designed to ensure the new laws work smoothly in practice.

MEP Chris Huhne has given details for the first time of the fledgling deal emerging from talks between deputies and Internal Market Commissioner Frits Bolkestein over the creation of rules designed to set a level playing field across EU financial markets.