McCreevy sells Merkel plan to US

Charlie McCreevy, the European commissioner for the internal market aims to lend his weight to the German government’s initiative on closer transatlantic economic co-operation while on a visit to the US next month (5-9 March).

McCreevy will promote co-operation on financial services regulation as part of German Chancellor Angela Merkel’s broader plans for a common transatlantic market.

Merkel began 2007 - and Germany’s presidency of the EU - with a high-profile visit to Washington, vowing to pursue the goal of an ever-closer transatlantic economic partnership. McCreevy emerged as one of Merkel’s strongest backers early this month, stating that he was "110%" in favour of the so-called transatlantic free trade agreement (TAFTA).

Ostensibly the main reason for the commissioner’s visit to the US is to push forward the transatlantic financial markets regulatory dialogue, a forum working towards closer integration of financial markets that meets several times a year. "Of course, it fits with TAFTA," said a European Commission official. "He wants to make it clear he thinks it’s a very complementary dialogue and that it actually fits with the broader idea."

Despite the occasional hiccup, the EU and US have chalked up a number of successes in regulatory co-operation in the area of financial markets. Both economies are on track to achieve the goal of converged accounting standards by 2009. Following the announcement of a merger between the New York Stock Exchange and the Paris-based Euronext last year, the US has agreed to observe EU standards on corporate governance.

Yesterday (14 February), McCreevy sent a letter to Washington setting out suggestions on how to resolve deregistration issues affecting European companies listed on US exchanges. Currently, EU firms with American shareholders find it difficult to delist from US exchanges because of onerous reporting requirements. The US Securities and Exchange Commission proposed to scrap current rules at the end of last year. According to a Commission official, co-operation on resolving the issue will "evolve through spring".

Marie-Therese Huppertz, executive director of the Transatlantic Business Dialogue (TABD), a coalition of EU and US business leaders lobbying for increased transatlantic regulatory co-operation, said that McCreevy would be well placed to promote Merkel’s drive. "So far, at least at the level of financial markets regulatory dialogue, he has built very constructive co-operation. There is a relationship of trust that has evolved over time that could be helpful," she said.

Members of the TABD met Merkel at the World Economic Forum in Davos last month to discuss the creation of a ‘framework agreement’ aiming at a reduction of transatlantic regulatory barriers. "We’d like to see much more aggressive co-operation on resolving regulatory differences," said Huppertz.

But a representative of the American Chamber of Commerce to the European Union counselled caution on pushing high-level talks forward too quickly. "There has to be a methodology that is informed by consultation otherwise governments are operating in a vacuum," said Patricia Finn, chairwoman of the chamber’s EU-US outreach group. "What we want to explain are the consequences, intended or unintended, of such policy."

But Finn pointed out that the US government had so far not shown an "enthusiastic response" to Merkel’s initiative, which is seen as being "long on ideas, short on detail". She was positive that McCreevy could successfully promote Merkel’s initiative.

A German diplomat said that the presidency and the Commission were now working "hand in hand" to prepare for the annual meeting of EU and US leaders in the second half of the German presidency.

Charlie McCreevy, the European commissioner for the internal market aims to lend his weight to the German government’s initiative on closer transatlantic economic co-operation while on a visit to the US next month (5-9 March).