BNE Blog

Making sense of the government’s Balance of Competencies review

By Phillip Souta

By Conor Brennan

Director of Business for New Europe, Phillip Souta, said businesses were “worried the UK is becoming isolated from the EU” at a Review of the Balance of Competences event at the European Parliament offices in the UK this morning.

Speaking alongside a panel which included Baroness Sarah Ludford MEP, Sajjad Karim MEP and David Seymour (currently Consultant Editor to Nucleus), Phillip Souta said that talk of an exit from the EU had now become “mainstream in the UK.” He stated the reason the review had come about was because of political pressure and it should be remembered the review cannot be entirely divorced from a political context.

Phillip Souta highlighted the campaign for EU reform lead by Andrea Leadsom MP and described the suggestion of a rolling in / out option for progressive UK Governments as “a recipe for legal uncertainty” and would have a negative impact on businesses. Concluding, he argued that reforms were needed in the EU and that the review could be a positive exercise.

Baroness Sarah Ludford MEP conceded she had initial reservations when the government announced a review of the balance of competences between the EU and the UK but was more positive about the assessment “by the day” and believes this could be an “extremely valuable exercise.”

Using the European criminal justice system as an example, Baroness Ludford highlighted the advantages of the UK using the EU where it was best deployed. The recent European Arrest Warrant issued for Jeremy Forrest, a teacher who had absconded with his 15 year old pupil to France, was a perfect example, she claimed.

Baroness Ludford praised a recent speech by Polish Foreign Minister, Radosław Sikorski, which called for the UK to re-engage with the EU.

The Review of the Balance of Competences should be fed into the decision making on the possible opt-out of the crime and policing laws in 2014, according to Baroness Ludford. She continued, a mass opt-out of these laws should not be made on “knee-jerk political dogma.”

Finishing, Baroness Ludford stated she remained enthusiastic about the review and on completion it could become something which is offered to the UK’s European neighbours as a model for their own engagement with the EU.

Sajjad Karim MEP stated that everybody agreed there was a case for reform in the EU but previously there has not been a mature debate in the UK on the EU. He said that he believed the review, initiated by the government, will support a mature debate on the role of the EU in Britain. According to Sajjad Karim this review is an assessment on the “grandest scale” and he hoped people in the UK would engage with the review and submit evidence.

In the following discussion, Baroness Ludford said she hoped the review would highlight benefits of the EU which many people may take for granted. For example, she highlighted that one million people from the UK live within the EU and exercise the free movement of people benefits associated with the EU.

Phillip Souta stated that 50% of the UK automotive industry exported to the EU and uncertainty on the role the UK has in the EU would not bode well for this industry.

Chairing the panel discussion, David Seymour said that often businesses were accused of blackmailing the UK if they publicly supported the EU and he was glad to hear Phillip Souta relay concerns of UK businesses.

The introduction of a single European Parliament seat in Brussels was an important reform that needed to be enacted in the EU replied Baroness Ludford to a question regarding reform in the European Union.

However, Mr Souta said he believed a change in the electoral process of MEPs would have a greater impact on the democratic deficit experienced in the UK on European matters.

Speaking before the panel discussion, a representative from the Foreign and Commonwealth Office outlined the general premise of the review set up by the government and confirmed more information will follow in the coming months.

Event Summary: ‘EIOPA and the future of insurance supervision in Europe’

By Phillip Souta

By Ariane Poulain

On 18 July, BNE and Aviva brought together a distinguished panel of speakers to discuss The European Insurance and Occupational Pensions Authority (EIOPA). Nikki Tait, Financial Times journalist, chaired the panel which included Gabriel Bernardino, Chairman of EIOPA, Pat Regan, Chief Financial Officer of Aviva, Andrew Bailey, Executive Director at the Bank of England and Mary Trussell, Partner at KPMG. This was BNE’s third and final panel discussion in a series on the European Supervisory Authorities (ESA).

Gabriel Bernardino, Pat Regan, Nikki Tait, Mary Trussell and Andrew Bailey

At Aviva’s London Headquarters, John McFarlane, Aviva’s Chairman, welcomed speakers and attendees to the event which sought to examine EIOPA’s competencies, how it foresees using its powers in relation to national authorities, such as the UK’s Financial Services Authority, and more generally, how EIOPA will find its place in the new financial supervisory structure alongside the European Banking Authority (EBA) and the European Securities and Markets Agency (ESMA).

Gabriel Bernardino began the discussion and stated that bringing stability to markets was crucial. He emphasised that whilst going from regulations to supervision was hard, the creation of the ESAs was a “landmark” and an important step in creating and fulfilling the European single market.

Commenting on EU policy-making in the insurance sector, Bernardino said that it is “a global business and needs to be viewed from an international perspective” and on pensions specifically, he noted they are “quite different from Solvency II and required a more risk-based framework.” Consumer protection, one of the five areas of EIOPA, is a priority at the European level and EIOPA was the first ESA to establish consumer protection guidelines, he added. On one of the other areas, oversight, Bernardino explained about peer review and he also outlined the issue of resources available to EIOPA as fundamental to its progress, mentioning that EIOPA only has 76 members of staff.

Pat Regan said that work on EIOPA is an “evolving landscape” and the question was really ‘how’ you regulate pensions across Europe. He stated that EIOPA has an important role in balancing all issues and concerns, from stimulating the real economy to health and education.  Regan also reiterated Bernardino’s comment that Solvency II has quite a different role to EIOPA itself; he emphasised that Aviva support for Solvency II continues and they are keen to see a timetable put forward which reflects the economic realities to prevent a more delayed Solvency II timetable.

Mary Trussell, Andrew Bailey, Nikki Tait, Pat Regan, Gabriel Bernardino

Andrew Bailey argued that insurance is an easy response to the crisis because whilst the EBA has a role in the new supervisory structure, EIOPA has the tools necessary to provide better supervision.  He said that, “supervision is how you apply the rules.” Agreeing with Bernardino, Bailey said there was too little reference to the need to preserve and enhance the single market and that its major benefits could be all too easily forgotten. The main issue to deal with and overcome is striking the right balance between clashing private and public interests.

Mary Trussell began by following up on Bernardino’s point about the importance of consumer protection in insurance alongside its role as a necessity. Trussell explained how she arrived earlier that day in London on a flight from the Netherlands and that her plane would not have taken off without insurance; Trussell used this example to highlight how there is not enough emphasis on the value of insurance and the significant contribution it makes to society during difficult economic times. She also noted the importance of providing transparency in regulatory frameworks to boost consumer accessibility. Across the insurance sector, and pensions specifically, Trussell believed that all would agree that greater consistency is vital, particularly as Solvency II moves towards implementation.

The Future Looks Promising for European Patents

By admin

By Ariane Poulain

Photo by European Commission

Over the past few weeks, there have been positive developments concerning European patent systems.  Initiatives which support the completion of the Single Market and advance – rather than hinder – innovation, growth, and jobs are definitely to be welcomed.

The current patent system in Europe is highly complex, costly and inefficient. Whilst the intergovernmental organisation, the European Patent Office (EPO), provides a single procedure for granting patents in 38 European (EU member states and eleven non-EU) countries, this procedure does not supersede national legislatures. For example, the EPO grants patents in English, French and German but in many cases nations require further patent translations in their own language. The EPO does not have the power to enforce patents across all member countries because a uniform European patent system does not exist. As a result, to patent an innovation throughout the EU the innovation must also (or instead) be validated according to national policy. The business or innovator can opt to apply for a patent via a national system or through the EPO. Read full article »

BNE Briefing on IMF Reform

By admin

By Eloise Nosworthy

Photograph: IMF

Earlier this week, the G20 announced it had agreed to make some fundamental changes to the IMF. The plans include the election, rather than the nomination, of Executive Directors, and a comprehensive set of practical reforms to do with currency manipulation and the resulting economic tensions between countries.

Most importantly, however, is the decision of abandoning two European seats in favour of developing countries. Dominique Strauss-Kahn, the Director of the IMF, has described this moment as historical, stating it was probably “the biggest reform ever in the governance of the institution”. The decision was taken in response to an increasingly tense economic and political situation, in the hope that progress can be made on some controversial international issues. Read full article »

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