Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-04-22-Speech-3-012"
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"Madam President, today’s debate takes place at a time when we are facing the greatest challenge to the European economy in modern times. Action is needed urgently: vigorous, targeted and comprehensive action in order to restore confidence, growth and jobs and to repair the financial system, to rebuild stability for the future, to promote trade and investment and to better protect our citizens – in short, to deliver an effective and stable financial system.
However, I also have to admit that I am disappointed with certain aspects of the compromise. The deletion of the group support regime, which I consider one of the most innovative aspects of the Commission’s proposal, means that we will not be able to modernise – as much as we wanted – the supervisory arrangements for insurers and reinsurers operating on a cross-border basis.
I also remain concerned that some of the amendments regarding the treatment of equity risk could result in the introduction of an imprudent regime for investment in risk-based capital. This is particularly the case for the amendments which introduce the so-called duration approach as a Member State option. The Commission will pay close attention to ensure that the implementing measures brought forward in this regard are prudentially sound.
Nonetheless, the Commission will support the agreement between Parliament and the Council, if it is endorsed by your vote. The current Solvency regime is over 30 years old. Solvency II will introduce an economic risk-based regime that will deepen integration of the EU insurance market, enhance policyholder protection and increase the competitiveness of EU insurers.
As confirmed recently by CEIOPS in their report on lessons learned from the financial crisis, we need Solvency II more than ever as a first response to the present financial crisis. We need regulation that requires companies to properly manage their risks, that increases transparency and that ensures that supervisory authorities cooperate and coordinate their activities more effectively. Solvency II will bring about a regime for the insurance industry that can serve as a model for similar reforms internationally.
The introduction of a review clause specifically mentioning the group support regime will enable the Commission to come back to this issue. I expect that progress in a number of different areas, connected to the recommendations of the de Larosière report, will have created a more favourable environment for reforms related to cross-border cooperation between home and host supervisors.
I now turn to the Weber report. Thanks to the efficient work of the rapporteur, Ms Weber, it has been possible to identify a compromise on simplified reporting and documentation requirements, in the case of mergers and divisions of public limited liability companies which will maintain a very significant part of the savings potential of the original Commission proposal, which amounts to EUR 172 million per year.
Measurements and studies carried out in the context of reduction of administrative burdens show that company law is one of the most burdensome areas of the EU acquis. For several reasons, administrative burdens hit SMEs harder than bigger companies. An expert report from 2007 estimates that small enterprises spend 10 times the amount that large enterprises have to spend in order to comply with information obligations imposed by legislation. Ten times, I repeat. At the same time, small businesses are the backbone of our European economy, and they are currently facing very difficult economic times.
In the current difficult and challenging economic situation we cannot afford such impediments. Instead we must strengthen our effort to ease the burden on our companies. In its resolution of 12 December 2007, the European Parliament welcomed the Commission’s determination to reach the goal of a 25% reduction in administrative burdens on undertakings at EU and national level by 2012 and underlined that it would examine legislative proposals in this light. Today, only seven months after the proposal was put forward by the Commission, I am very pleased with this compromise, even though the Commission had gone even further in its original proposal. I look forward to Parliament endorsing this compromise, which will rapidly bring significant benefits to companies, especially to SMEs. And we should not stop there. Simplification and reducing red tape will remain at the heart of the Commission’s agenda.
Based on the Commission’s communication of the beginning of March, the Spring European Council set out a strong EU action plan for the future – a strategy to address the regulatory gaps in the financial sector, to restore incentives and to reform supervision to match the single EU financial market. In a few weeks’ time the Commission will present its views on the road towards building a state-of-the-art supervisory framework in Europe. These will be discussed by the heads of state or government in June. The Commission is ready to put concrete measures on the table in the autumn.
Clearly, global problems also require global solutions. The EU initiative to agree a coordinated global response to the financial crisis has been very successful. At the London meeting, G20 leaders made extensive commitments to address the weak points of the financial system in a coordinated manner, to jointly build a new financial architecture while defending an open, global economy.
The situation in the EU financial sector is serious. But a lot has already been done, and I am glad to note that the Commission, the European Parliament and the Council have reacted quickly and cooperated closely to respond to the crisis. We are about to successfully conclude the adoption of three key measures: firstly, the regulation on credit-rating agencies; secondly, the recast of Solvency II, as well as, thirdly, the revision of the Third and Sixth Company Law Directives on domestic mergers and divisions.
Firstly, the agreement reached on a regulation on credit-rating agencies will help address one of the problems that contributed to this crisis and thus will offer some prospect of restoring market confidence. The proposal adopted by the Commission last November sets some clear objectives for improving integrity, transparency, responsibility and good governance of the credit-rating agencies. The thrust of the initial proposal is preserved in this regulation, which will in particular secure the analytical independence of credit-rating agencies, the integrity of the rating process and an adequate management of conflicts of interest that existed before in the rating process. Moreover, a comprehensive supervisory regime will be put in place. European regulators will supervise the conduct of credit-rating agencies and take enforcement action where necessary.
On the issue of supervision, I have been vocal about the need to strengthen supervisory cooperation. I have therefore no difficulty in agreeing on the need to push forward in this crucial domain. Therefore, in order to ensure consistency and coherence in all relevant financial sector regulation, the Commission agrees, on the basis of the recommendations of the de Larosière report, to examine the need to strengthen the provisions of this regulation with regard to supervisory architecture.
On the issue of the treatment of credit ratings issued in third countries, the outcome of the G20 summit has changed the global situation. All G20 members have agreed on regulating credit-rating agencies through the introduction of mandatory registration and oversight regime. That is why I agree with the solution agreed in the negotiations between the Council and Parliament on the treatment of ratings issued in third countries.
I am pleased to note that the ambitious goals set by the Commission proposal have been kept. The Commission is very pleased with the outcome of the codecision process.
Let me now turn to Solvency II. I would like to thank the rapporteur, Mr Skinner, and Parliament for their work and their willingness to compromise in order to reach agreement in a single reading on this important subject. Such an outcome will be widely welcomed by the EU insurance industry, by supervisors and by stakeholders in general."@en1
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