Verbatim report of proceedings

Wednesday, 2 February 2011 - Brussels

17. Appointments of ESA senior executives (debate)

  President. – The next item is the Council and Commission statements on the appointments of ESA senior executives.

  Enikő Győri, President-in-Office of the Council. − Mr President, I would like to thank the Commissioner and the honourable Members – my dear ex-colleagues – for giving me the opportunity to comment, on behalf of the Council, on the appointment process of the chairs and executive directors of the new European Supervisory Authorities – the ESAs – and on the principles that should guide the performance of their duties.

The ESA regulations, which we adopted less than three months ago, give no specific role to the Council in the appointments of the chair and executive director of each ESA, which are made by the respective board of supervisors.

Hence, in accordance with the ESA regulations, the chairperson of each ESA is appointed by the board of supervisors. Furthermore, the ESA regulations give a crucial role to the European Parliament, which has been granted the possibility of objecting to the appointment of those senior executives and of removing a chairperson from office following a decision of the board of supervisors.

Where, then, does the Council stand in this scenario? Well, the Council, as co-legislator, has agreed with Parliament to insert in these regulations provisions that aim to ensure that members of the board of supervisors – the management board – the chairperson and the executive director of each ESA are protected by, and bound to, strict independence so as to act solely in the interests of the Union.

I will not quote in full the provisions of those regulations, and more particularly Articles 42, 46, 49 and 52, but their spirit is clear. This is that neither the voting members of the boards, nor the chairperson or executive director, shall seek or take instructions from EU institutions or bodies, Member State governments or any public or private body, and that these, in turn, shall not seek to influence the chair or the executive director in the performance of their tasks.

The ESA regulations are subject to the staff regulations adopted by the EU institutions. They also contain a number of key provisions that aim to ensure that the chair and executive director of each authority are selected in the most objective way, on the strict basis of the criteria set out in Articles 48 and 51 of the regulations.

Apart from the managerial experience specific to the executive director’s profile, I note that both those articles list as criteria ‘merit, skills, knowledge of financial institutions and markets, and experience relevant to financial supervision and regulation’.

As far as financing is concerned, the Council placed high ambitions on the ESAs when it adopted the regulations, and I am sure that was also the case with Parliament. It now falls to both institutions, as budgetary authorities, to ensure that those ambitions are translated into the appropriate means each year, on the basis of the Commission’s budgetary proposal.

The Presidency also attaches great importance to all Member States fulfilling their obligations towards the new authorities. For the Council, as co-legislator, it is essential that all the provisions of the regulations are implemented completely and faithfully. We expect the European Commission, as the Guardian of the Treaties, to ensure that this is indeed the case.

As the honourable Members will be aware, the Commission is also entrusted, in recital 55 of the regulations, with the responsibility of drawing up a shortlist of candidates to steer the process of selecting the first chairperson of each authority. Parliament and the Council agreed to this starting procedure when adopting the regulations.

I hope that the chairpersons will now be able to start their work. It is of primary importance for the new agencies to be up and running as soon as possible. They are an essential part of the EU’s response to the challenges posed by the financial crisis. We cannot afford to wait, and I am sure I can count on the full support of Parliament to ensure the smooth establishment and running of the new agencies.

As a result of the good cooperation between Parliament and the Council, the EU has a brand new supervisory authority structure. It is our common responsibility to ensure that ESAs get down to business as soon as possible.

As the representative of a Parliament-friendly Presidency, I am fully commited to working in maximum harmony with the European Parliament, and I also hope to be able to work with a Parliament that is a faithful partner.

  Michel Barnier, Member of the Commission. − (FR) Mr President, Minister, ladies and gentlemen, the European Union has had a new supervisory system for the financial sector since 1 January.

This system, combined with the fundamental reform of the regulation of the markets and financial operators will enhance financial stability in the Union and, I believe, will expand opportunities and lay solid foundations for the financial industry, which is extremely important in our countries.

I would like to begin by congratulating the European Parliament on the key role it has played in this process for several years. That we now have a more effective supervisory system for the financial sector and are drawing on the lessons of the crisis in this area, as in others, is largely due to the European Parliament.

We are now approaching the final stages of the creation of this new architecture of the three European Supervisory Authorities with the appointment of their chairpersons and executive directors in the next few days. Ladies and gentlemen, these appointment procedures were conducted with complete transparency and in full compliance with the regulations that created the authorities as well as other rules governing the appointment of the heads of the regulatory agencies of the Union.

Approximately 275 applications were received for the six posts I have just spoken about. They were all considered carefully and objectively. The roles allocated to the different stakeholders, to the European Parliament, to the board of supervisors, and to the Commission itself were scrupulously adhered to. In the future, we will continue to ensure that the process is transparent and properly planned so as to enable the Committee on Economic and Monetary Affairs (ECON) of the European Parliament to play its very important role to the best possible effect.

This Parliament has made, and continues to make, big demands of these authorities, and I think it is right to do so. It is making demands that I can understand. Like Parliament, the Commission takes the view that the chairpersons and executive directors of these authorities must be chosen on the basis of merit, experience, independence, their commitment to Europe and their knowledge of issues linked to the supervision and regulation of financial markets. Ladies and gentlemen, this is the spirit in which the selection procedures under way have thus far been conducted on the basis of the applications we have received.

In addition, since Parliament and the Council decided, in Article 68 of the regulations creating these authorities, that the chairpersons and executive directors would be subject to the rules applicable to the staff of the institutions of the Union, the Commission has ensured that that is what is happening and that, in this area as in others, the regulations are being complied with.

Ladies and gentlemen, you have expressed concerns with regard to the salaries and the maximum age of the senior managers of these authorities. In this respect, we have explored all avenues in order to obtain maximum flexibility and this issue may, if necessary, be re-examined when the functioning of the authorities is reviewed, which is scheduled for the end of 2013.

I also endorse the intention of this Parliament to achieve the optimal gender balance at the head of these authorities. In the preselection procedure the Commission rigorously applied the principle of equal opportunities on the basis of the applications that were registered. I note in this regard that, in the latest process for the appointment of the executive directors, which is ongoing and has not yet been completed, two very able women are in contention for a post as executive director.

I fully agree with Parliament that we need strong authorities, which are independent of political or other interference. The chairpersons, executive directors, and voting members of the different boards must be completely independent and act solely in the interest of the Union. Parliament and the Council have enshrined this principle in the regulations creating the authorities, in particular in Articles 42, 46, 49 and 52, which Minister Győri referred to just now.

The Commission, as the guardian of EU law, will totally and fully assume its responsibilities to ensure that these Articles are rigorously complied with. I would add that the Commission will be present in the governing bodies of the authorities and that, in this regard, it will, of course, be vigilant so as to ensure that any decision that is taken in the interest of the Union.

As regards the composition of the board of supervisors, the Commission has already highlighted the legal necessity and the political importance of ensuring that these boards are composed of the heads of the competent national authorities. I have personally written to the authorities to clarify this point, where it needed clarifying. Some national authorities have since modified their representation. Others still have to do so. You can rest assured that the Commission will keep this point under very close scrutiny and will be inflexible.

The composition of the boards of the authorities must fully respect your wishes and those of the legislator in general, and I will personally see to it that the heads of the national authorities are actually present at least, and I repeat, at least twice a year in accordance with Article 40 of the regulations that created these authorities.

Finally, ladies and gentlemen, I endorse the intention of this Parliament to ensure that these authorities have the necessary financial and human resources to perform their duties in a credible fashion. The budgetary authority can count on the technical support of the Commission to ensure coherence between, on the one hand, the responsibilities assigned to these authorities and, on the other hand, naturally, the resources allocated to them to assume these responsibilities.

Mr President, ladies and gentlemen, it is now essential that the procedures to appoint and confirm the chairpersons and executive directors of these authorities are completed successfully. These authorities need to get down to work. I can assure you that, every day, I have proof of the usefulness of these new authorities, since we currently consult them on an almost daily basis.

The tasks that these authorities have to assume in cooperation with the European Systemic Risk Board are of the utmost importance. We wanted them to be fully operational from 1 January. It is now the responsibility of each of us, in our own particular role, to allow them to perform their task swiftly and under good conditions. To achieve this, they need the full support of your institution.

I wish to reaffirm here that, for its part, the Commission will ensure that the intention of the legislator is fully respected and that these authorities work exclusively and solely in the interest of the European Union.

IN THE CHAIR: Dagmar ROTH-BEHRENDT
Vice-President

  Jean-Paul Gauzès, on behalf of the PPE Group. – (FR) Madam President, Mrs Győri, Mr Barnier, this debate right now is not a legal debate; it is a true political debate. It is a debate on the future of financial regulation in Europe. It is the culmination of one aspect of the work conducted by Parliament, with the Council, under the guidance of the Commission. I am therefore going to be quite clear.

For us, it is not about indulging in some sort of revolution or showing our biceps just for fun. It is about ensuring that the spirit that presided over the agreements between the Council and Parliament is, in fact, respected. It is not a lesson in law. The texts do not matter. We know the texts. What matters is the way in which these texts will be put into effect. In this regard, I would like to thank the Commissioner for the clarity of his speech.

We have never sought to call the Commission into question, and the words spoken by the Commissioner are totally in accordance with the wishes of Parliament. We are talking here about a political act that consists in saying: ‘These institutions have been established, so we must give them the concrete resources to function properly.’

Yet, I think that we do not simply have doubts but also suspicions about the way in which these provisions have in fact been implemented by a number of Member States, by those that wish to unravel European supervision and prevent financial regulation at European level. That is what we are speaking out against, because we believe that, if that had been the case, we would have been cheated in the negotiations on supervision. The negotiations were long; they were difficult. Everyone made compromises. The Belgian Presidency did some remarkable work and the Commissioner provided extraordinary impetus. Today, we could be faced with institutions without effective power: due to the low status of the staff appointed; due to the fact that the Member States did not choose the best, and perhaps because the salaries were not attractive.

In any event, today Parliament needs a concrete answer. Minister, I am bound to say that, despite the friendship that I feel for you, having sat on the same bench, in the same group and on the same committee as you, the letter, which I have seen and which, I admit, is only a first draft, is inadequate.

I will give you the response of the Group of the European People’s Party (Christian Democrats). It is simple. You say, on behalf of the Council, that you fully endorse what the Commissioner has just said. I can tell you that, for us, this will be a satisfactory declaration. The statement made by the Commissioner is precise. It deals with problems of human and financial resources. Your letter needs to state: ‘We agree with virtually everything the Commissioner said’. Mrs Győri, this is very important.

We agree with virtually everything the Commissioner said in plenary this evening.

  Udo Bullmann, on behalf of the S&D Group. – (DE) Madam President, ladies and gentlemen, why are we here? Mr Barnier said that we are here because the European Parliament has succeeded in establishing European supervisory authorities that are worthy of the name. That was not part of the Council’s programme. It was not part of the Member States’ programme. The Commission, too, had doubts about how long we would actually persevere with regard to the establishment of this new institution. The Council will understand – it will have to understand – and the Commission will, too – possibly even of its own accord – why we are concerned.

No, this European Parliament – and this is a statement that I find applies to all party groups, not just to us as Social Democrats – will not allow national games to be played that undermine the powers of these new supervisory authorities. That is why we are interested in the appointment of staff, of course. We have rights in this regard – we have to be consulted.

There are one or two things that in fact give us cause for concern. We receive lists of individuals and we receive lists, which when we look at we cannot actually tell whether a gender criterion has been applied. We are given proposals for candidates, which when we consider – and I say this with all due respect to the people concerned – we do not see anyone that we believe could not do a decent job. These are clearly good people who have already shown in their jobs that they can do their work well, but the people that have been presented to us are not people who, on the basis of any authority that they may have demonstrated in their past work, can actually say to the national supervisory authorities where they would stand in the event of a conflict. Where there is European supervision, national momentum comes to a standstill. That surprises and annoys us, and it must call us into action.

No, these procedures are unsatisfactory, and I ask myself why, for example, we cannot take the same approach as we are taking with regard to those responsible for OLAF, where you are of course interested in the opinion of this House. Why can we not do that? We still have another opportunity with regard to the executive directors. You can still demonstrate that you are interested in the opinion of the European Parliament. You still have another opportunity. I would urge you both – President-in-Office of the Council and former fellow Member Mrs Győri and Commissioner Barnier, to take this opportunity. You can take on board the objections of this House. You can tell us very clearly how you want to work with us in future. You can tell us very clearly what goals you will support in the 2013 reform and how you will equip the institutions. You will also be able to make it very clear whether you are interested in our opinion in respect of those members of staff that are still to be appointed. I therefore ask you in all earnestness in the interests of Europe to provide these rules quickly.

  Sylvie Goulard, on behalf of the ALDE Group. – (FR) Madam President, Mrs Győri, Commissioner, thank you for being with us this evening. We are well aware that there was limited time available, so we thank you even more for having begun to answer us. I think it is important to put our motivation clearly into perspective, as my fellow Members have done.

What motivates us is that we have fought collectively for months to ensure that there is a ‘before the crisis’ and an ‘after the crisis’, that, in this internal market, which has facilitated the expansion of financial services and banking activities, and we are entirely in favour of all the cross-border work done by the sector, common rules and supervision are brought into line. To be frank, during the negotiations – and with the support of the Commission moreover – it became very clear to us that we were being troublemakers. We saw all too clearly that there were some Member States that wanted to remain in control of the supervision and did not want anyone to poke their noses into their business.

Mrs Győri, you tell us that the Council has no say in the appointment of these officials, which is legally correct, but some Member States are lying in ambush. Moreover, the Commissioner pointed out that his departments had to tell some countries to send pre-eminent people. Therefore, this Parliament is doing its work, in trying to ensure independence, resources and the resolve to move forward.

We are, of course, aware of our responsibilities. We, more than anyone else, want these authorities to set to work, since we have contributed personally to their emergence. We have no desire to delay their work; I am thinking, for example, of the bank stress tests, which are so important. However, the simple fact is that, as has been pointed out, we will be demanding, we are going to sleep on the issue and take the necessary time to look in detail at what you have told us, each of you in turn, and we will take a decision with a clear conscience.

I would like to thank Mr Barnier for having made some very clear statements and I would ask you, Mrs Győri, not to be naive. There is a lot at stake.

  Sven Giegold, on behalf of the Verts/ALE Group. – (DE) Madam President, ladies and gentlemen, in my view, this is a question of making the best possible use of the possibilities provided by the law to actually provide strong financial supervision in Europe, and we have our doubts about whether these possibilities are in fact being utilised to the best possible extent in the institutions. We are seeing shortcomings in the procedure. As Parliament, we have so far not been able to see the list of candidates in advance, but only the finished result. It would be very easy to send us this list now for the executive directors. We quite clearly have a lack of gender equality when it comes to filling the posts, and, due to certain events during the process, we have our doubts about whether the Member States will in fact fill the posts in this institution in the interests of Europe.

That and the other points in our letter entitle us to ask a fundamental question. However, over and above this there is, of course, also the question of the suitability of the individuals, and in this regard each person has to be assessed individually on the basis of their skills. We see two major problems with this. In the hearings, we found that one of the candidates disputed the fact that this was a European institution, but talked instead about a network of supervisory authorities, and even when asked about it he was not prepared to correct this.

We did not receive any clear responses when we asked them whether they were prepared to make all lobbyist contact with the financial industry transparent. We have sent a letter to all three candidates, and as far as we are concerned the outcome of the vote is dependent on whether we receive clear and comprehensive responses to this.

  Kay Swinburne, on behalf of the ECR Group. – Madam President, the ECR welcomes the opportunity to discuss these issues in the Chamber this evening.

I would like to make it clear that our group believes that all three candidates for chairing the ESA, as presented to the Committee on Economic and Monetary Affairs yesterday, are fully qualified and competent to fulfil the important roles involved.

Any comments I make this evening are purely about the process that has been followed to get to this point. I would ask, therefore, that future selection processes aim to recruit candidates from the broadest possible pool of talent in order to ensure independent thought and a new diversity in the senior management of such authorities. To that end, salary scales need to be appropriate to the expected seniority of those roles. Unnecessary age restrictions, or any other criteria outside technical skills and competence, should be avoided at all costs.

We can do a little better than we have done this time in terms of the process and the transparency that could be applied with respect to Parliament. I hope that note is taken of this in the future.

  Marta Andreasen, on behalf of the EFD Group. – Madam President, I believe there is no need for these agency supervisor posts because I believe there is no need for the agencies themselves. Is creating another level of supervision called ESMA going to represent an improvement compared with existing supervisory authorities? I believe that, by doing this, we are only going to cause confusion about who is responsible for what.

Will the supervisory authority produce regulations suitable for the world’s largest financial district? I doubt it. I think, instead, that the pet theories of the anti-market crowd will be adopted and forced upon the City of London. The problems caused by financial activity in recent years were due to rule books being either torn up or ignored by those whose job it was to enforce them.

There is no guarantee that these authorities will do anything better. Moreover, we have been presented with only one candidate for each post – a totally undemocratic exercise. Of course, it is the same that was used to appoint the President of the Commission, the rest of the Commissioners and the High Representative. I could go on with a long list. I encourage you all to vote against these or any other candidates.

  Michel Barnier, Commission. − (FR) Madam President, I will be brief, as I have expressed myself as sincerely and as clearly as possible. I have carefully weighed each word of my statement, which will be confirmed in writing in a letter that I have co-signed with Vice-President Šefčovič so that things are extremely clear.

In response to each of your speeches, which I thank you for, I would simply like to mention three issues.

The first issue concerns the independence and the authority of the chairpersons of the authorities. I am very pleased with, but not surprised by, the total commitment of Parliament, which is shared by the Commission, to defend this independence and this authority and to ensure that they are respected over time. It is crucial and it is what is important for the future, bearing in mind the multitude of tasks and the seriousness of the tasks that these authorities are going to face. Earlier, the issues of the rating agencies and the stress tests were raised. These are issues for which we are going to need the authorities and their credibility. This is the first point I wanted to make, on which Parliament and the Commission, of course, and, I hope and believe, the Council, can agree.

The second point is that of the selection procedure. Ladies and gentlemen, I remember the discussions at the trilogues, where this procedure was the subject of numerous debates and, finally, of agreement among the co-legislators. It is what it is and it doubtless has its shortcomings. I personally brought in the rendez-vous clause to improve it. I have no reason – and I say this to you in all conscience – to think that it has not enabled good candidates to be selected. I have no reason to question the motives of the candidates chosen. After I had received the shortlists and met each of the candidates in person, I personally took responsibility for establishing an order according to what I felt, in all conscience, were the most useful and the most credible criteria. However, in order to find these good candidates, we relied on the lists given to us and the 275 applications from the regulatory authorities of the Member States. We have a rendez-vous clause to improve these procedures, which undoubtedly can be improved. But I would like to say, in all conscience, that, as far as I am concerned, I have no reason to say or to think that we have not selected good candidates, who are capable of living up to their responsibilities.

Finally, there is a third point, which a number of you have raised, which is that of the level of representation of the authorities. The Commission will always ensure that this representation is in full compliance with the regulations and at the highest level. I would like to express my sincere thanks to the European Parliament for supporting us in this absolutely crucial issue, which is also one of the keys to credibility.

Madam President, ladies and gentlemen, that is what I wanted to say, before we all retire to sleep on it, as a previous speaker said. That is what I wanted to give you as an assurance, as a concern, which I would like to express personally on behalf of all the Commissioners, for vigilance to ensure that these authorities succeed. This will provide genuine European supervision, which will not replace national supervisory authorities but make them work together more effectively, which will have its own powers when facing challenges and risks, which are now clearly transnational.

We needed, and we now largely have, thanks to you, these three radar screens, these three authorities in addition to the European Systemic Risk Board. Ladies and gentlemen, it is now necessary for everyone to get swiftly to work because, frankly, I note that the markets are moving very quickly, much more quickly than us, in this, our time of democracy, and the authorities need to work very quickly.

  Enikő Győri, President-in-Office of the Council. − Madam President, honourable Members, first let me answer the question which came up very often in this debate: will the Council agree to review the appointment procedure in the regulation?

Well I know that the same recital states, for the subsequent designations of the chairpersons, that the opportunity of having a shortlist drawn up by the Commission should be reviewed in a report.

I also know that Article 81 of the regulation also makes provision for the review by the Commission to be sent to the European Parliament and the Council by 2 January 2014 and every three years thereafter. So this will give us an opportunity to improve the regulation in due time on the basis of practical experience, and in this spirit I look forward to a constructive dialogue between our institutions to pave the way for the future assessment.

President-in-Office of the Council. − (HU) Madam President, the speeches delivered by the Commissioner and me were framed by our respective competences. We received the letter of the Chair of the Economic Committee, and both of us tried to answer questions fitting into our respective competences. I tried to convince you that there are guarantees of independence and, in the creation of the budget, the task of the Council and Parliament, as the two institutions having financial responsibility, is to ensure that these institutions are in operating condition. As such, it seems to me that there is clear task sharing and unambiguous commitment on the part of all institutions.

The letter sent today by the Chair of ECOFIN, Minister György Matolcsy, in reply to the letter sent by the Chair of ECON this morning, was written in this spirit, and I trust that, along with the Commission’s opinion, you will find it to be a satisfactory response. The Council and the Presidency-in-Office fully support this. This was the question of Mr Gauzès, which the Commission answered regarding the topics within its competence. I therefore hope that, after this, there will be no obstacles to Parliament supporting the candidates tomorrow, and the supervisory authorities will finally be able to commence their work.

  President. − Three motions for resolutions to wind up the debate have been tabled under Rule 120 of the Rules of Procedure.⁽¹⁾

The debate is closed. The vote will take place tomorrow at 11:30.

Written Statement (Rule 149)

  Alfredo Pallone (PPE), in writing. – (IT) This Parliament has made an important contribution to the creation of the new European Financial Supervisory Authorities. Hence it wants to emphasise its role this evening, also, and it calls on the Council and the Commission to pledge to ensure that the Authorities operate independently and have the personnel and the resources they need. This applies no matter who is appointed. The candidates for the posts of chairpersons of the ESAs have, in fact, proven to be competent and professional, and I am sure that they will be able to carry out the role in an impartial and more than satisfactory manner. I think it is crucial to support the candidates and to ensure that these Authorities are in a position to start work as soon as possible, since there are many problems to resolve and they require immediate action. It was this requirement which prompted us to create the Authorities and which we shall have to remember tomorrow during the vote.

(1) See Minutes.