Economics

A report finalised this month by the Oireachtas European Scrutiny Committee which assesses new EU plans to create a robust EU-wide system of financial supervision by developing a single rule book for regulation will be debated in D il ireann at 2 pm today.

Under the new proposals, the EU intends to significantly reform the European system of financial regulation by the end of the year. This new structure would have the power to compel financial institutions to take specific actions when directed to do so, develop new harmonised standards, issue warnings, enforce proper application of new rules and improve investor protection.

While the Committee broadly welcomed the initiatives in the plan it expresses some concern regarding the speed of its introduction and the potential negative consequences this could have.

Chairman of the Oireachtas Committee on European Scrutiny, John Perry TD said;

“The main purpose of the Committee’s report is to inform the Minister’s position on these important set of proposals in the Council of the European Union and to ensure our MEPs are fully informed so that these proposals are subjected to the full rigours of the European Parliament.

Progress on this package of legislative proposals has been swift by EU standards. The Council’s aim is now to reach agreement on the proposals with the European Parliament by the end of its first reading which will probably be completed in May or June this year. While I acknowledge the urgency of the situation in relation to the financial crisis and the need to restore confidence in the financial markets the Committee is concerned that these very important proposals are being rushed. More often than not, rushed legislation leads to poor legislation.

Notwithstanding this concern, there are many aspects of these proposals which should be welcomed. The powers of these new Authorities will be extensive, up to and including issuing legally binding decisions to national regulators and even individual financial institutions. The proposals will enable the EU through these new authorities to act more swiftly and coherently in emergency situations and to intervene in the settlement of disputes which may emerge between national regulators.

The report and this debate today also helps to raise awareness among the public about this important legislation which will have significant implications for Ireland’s financial system and in turn the real economy.

It is vitally important that EU legislation such as the proposal under debate today is subjected to proper scrutiny by national parliaments. The Lisbon Treaty offers more opportunities for national parliaments to become involved in EU law making and it is essential that this House takes full advantage of these opportunities. I strongly believe that greater involvement by the Oireachtas and more debates such as this one on the floor of the D il will make for better, more understandable EU law, which reflects the interests and needs of the Irish public.