The foundations of our reform proposals are the core principles of subsidiarity - ‘Europe where necessary, national where possible’ - and proportionality. More specifically, the ‘better regulation’ agenda where we endorse the new Commission structure, the equal treatment of all Member States and making the Single Market work. We also propose the rigorous application of the principle of non-discrimination between Member States and the consideration of a permanent chair of the Single Market and of the Eurogroup in the European Council.
As the Eurozone lays plans to bolster its economy which may lead to greater 'federalisation', it will be important for those outside of the bloc to be assured that the 28 Member States remain at Europe’s centre of gravity. The importance of stabilising the Eurozone should not become a risk to the cohesiveness of the wider EU or the Single Market.
Developing the EU Member States bilateral dialogues programme provides an opportunity to draw upon the reform ideas that are common in other countries. We have found a lot of common ground in the debate around EU reform and a real willingness to develop a joint agenda while in Berlin recently.
During the course of this visit we engaged with over 50 policymakers, officials, practitioners and representatives of industry associations. Highlights included a dinner hosted by British Ambassador Sir Simon McDonald KCMG with Dr. Andreas Dombret (Member of the Board, Deutsche Bundesbank), a breakfast meeting with Ingrid Arndt-Brauer (Chair of the Bundestag’s Finance Committee) and five other members of the Finance Committee as well as meetings with Dr. Nikolaus Meyer-Landrut (Chief Advisor for European Affairs to Chancellor Merkel) and Dr. Levin Holle (Director General Financial Markets Policy, Federal Ministry of Finance).
There is a genuine concern amongst German practitioners that the UK might leave the EU. The majority of policymakers, officials and practitioners we met are in favour of the UK’s continued EU membership. A shared interest in reform of the EU was notable. The relationship with the UK is seen to be of strategic importance for Germany, especially as it brings an outward-looking perspective to European debates. German policymakers share the view that EU reform is an important task for the next few years with rising levels of Euroscepticism highlighting the need to make the EU work better for all 28 Member States – the issues we face here in the UK are far from unique to us.
The last European mandate rightly focussed on stability. There is now a need to move towards jobs and growth and Europe’s politicians need to advance an agenda that makes sense to Europe’s citizens and that promotes economic development. This message came across very clearly in Berlin.
There are a whole range of major challenges that can partly be solved by well-functioning capital markets which underlines the importance of ensuring the Commission’s Capital Markets Union (CMU) proposal will be a success. Our work in support of CMU has already begun. Rachel Lomax, chair of our senior regulatory group, the IRSG Council, has written to UK and European policymakers setting out principles that the IRSG believes should be taken into account in the creation of CMU.
We will undertake further work on CMU, including an analysis of corporate financing requirements and its potential benefits. We also plan a legal analysis on the barriers to the development and integration of capital markets in the EU.
The significant work we are conducting on the CMU will also now include working with practitioners from across the spectrum of the German Financial Services industry to present coherent policies to the Commission.
Of course, such discussions should be seen in the context of global competitiveness, a key point, very well understood by our counterparts in Germany, Italy and across Europe. Much of our discussion around the global context centred on the Transatlantic Trade and Investment Partnership (TTIP).
There was strong agreement that regulatory coherence is central to the agenda. Our work in this field was well received and the need to provide support for the negotiators was seen as critical. The new European Commissioner Malmström and changing dynamics in Congress following the US mid-terms, could bring a fresh start to the TTIP negotiations by bringing a new focus and rigour to tackling key issues; hopefully concluding with an ambitious and comprehensive agreement by the end of 2015.
As we look ahead to 2015 and a full programme of work around EU reform, it is pleasing that we will now be adding a formal Anglo-German dialogue to run alongside those we already have in place with the French and the Italians. We are also in early discussion with colleagues in Poland, Ireland, the Netherlands and Spain demonstrating the clear appetite to come together as a European industry on the key issues of reform and CMU.
In January and February alone we already have events in place with Syed Kamall MEP, Anneliese Dodds MEP, His Excellency Dr Peter Ammon German Ambassador, and Dr Andreas Dombret, Member of the Deutsche Bundesbank’s Executive Board as well as a programme of meetings in Brussels, the Netherlands and Italy.
Please do get in touch if you’d like to find out more about this important work including how you can become involved.
The Italian Presidency has been clear: it is building the framework for a five-year EU jobs and economic growth agenda. The recent launch of the Anglo-Italian Financial Services Dialogue (AIFSD), therefore, could not have come at a better time.
Last week we were in Cardiff, kindly hosted by Wayne Harvey, Senior Partner at Deloitte. There we discussed the role of our industry in the city and the wider Welsh economy. We also considered how greater inward investment might be encouraged. With plans for the further devolution of powers from Westminster firmly on the agenda following the referendum on Scottish independence, and the recent publication of the final report of the City Growth Commission, this was an apt time to discuss how Cardiff can develop its offering to businesses looking to establish or grow both regional operations and headquarters. The seminar formed part of our ongoing programme of engagement in financial and related professional services centres across the UK.
The Liberal Democrats returned to Glasgow for their party conference this year, having moved the date so as not to clash with the Scottish independence referendum. Unlike the Labour Party conference, where there was a palpable mixture of exhaustion from the campaign and relief at the survival of the Union, the Lib Dems were in a more contemplative mode, with the benefit of several weeks’ hindsight and developments such as the convening of the Smith Commission, which will consider Scottish devolution.
Two sensational newspaper splashes greeted delegates arriving at the Conservative Party Conference, and indeed talk of scandal and defection was hard to avoid at Birmingham’s watering holes. Arguably, there were two developments of greater importance happening alongside the conference, ones that will potentially have a greater bearing on the outcome of the General Election and the next five years of Parliament.
In the main conference hall of Manchester Central, Shadow Chancellor Ed Balls MP burnished his party’s commitment to fiscal probity, re-stating commitments to balanced budgets with tax rises and spending restraint. Labour leader Ed Miliband MP also pledged to grow the number of high-quality apprenticeships for young people, re-pledged to break up big UK banks and promised to transform the NHS.
It’s always interesting to get away from the UK debates engaging TheCityUK, and to go to another EU member-state for an alternative view. TradeWonk’s annual visit to Ireland was a welcome opportunity to do so and to be exposed to Irish viewpoints for much of August.
This week we were in Belfast, kindly hosted by Citi, for a seminar to discuss the role of financial and related professional services in Northern Ireland.
A TheCityUK delegation, led by Mark Garvin of JP Morgan, visited Rome for a day of meetings on 23 July to prepare for the establishment of an Anglo-Italian financial services dialogue during the Italian Presidency of the EU.
Earlier this year I was invited by the British Chamber of Commerce of Morocco to give a speech on ‘Developments in Islamic Finance in the UK’ at a conference on “Islamic Finance in Morocco”. The conference happily coincided with the visit last week of the Rt Hon Lord Mayor of the City of London, Alderman Fiona Woolf, so I was able to join her delegation for a very full and productive programme in Casablanca and Rabat. As well as a 20 strong business delegation, the Lord Mayor was supported by the Prime Minister’s Trade Envoy to Morocco, Lord Sharman.