On Wednesday, the EU’s ministers for finance reached an agreement on a new financial supervision structure. After negotiations in the Council, the finance ministers reached an agreement to establish three new supervisory authorities for banking, insurance and securities markets. Paulina Dejmek is Finance Attaché at the Swedish Permanent Representation in Brussels and she has chaired the negotiations in the Council together with colleagues from the Ministry of Finance.

What does the decision taken at the Ecofin Council on Wednesday mean?
The Presidency has been given the mandate to start negotiating with the European Parliament to reach a final agreement. Thus another part of the EU’s new structure for supervision of the financial markets is in place. The new authorities are able to take decisions that are binding for national supervisory authorities. The second part of the new structure was decided in October by the Ecofin Council. It concerns the establishment of a new body, the European Systemic Risk Board, which is to supervise systemic risks in the EU financial system as a whole.

The objective of the new supervisory system is to prevent future crises on the financial markets and to ensure that financial supervision in the EU improves and becomes more efficient and better coordinated. This has been one of the Swedish EU Presidency’s top priorities and Wednesday’s agreement in the Ecofin Council is therefore a great success.

What has your role been in the work to reach the decision?
In addition to formally chairing the meetings in the Council working group, I have worked intensively to draft new compromise proposals. At the same time, I have had a great number of bilateral contacts and negotiations with the Commission and other Member States to reconcile conflicting interests.

Which have been the greatest challenges in the work to reach the decision?
The Commission presented its proposals at the end of September, which meant that the Presidency had extremely little time to reach an agreement. At the same time, the proposals broke new ground and therefore contained a great number of difficult legal and technical issues, which made negotiations even harder. Nor is it a secret that even if all Member States were in agreement that improved supervision of the financial markets is needed, it was clear that the level of ambition concerning the new system varied.

What is the next step to take on an EU level?
The Presidency now has the mandate to commence negotiations with the European Parliament. The objective is to reach an agreement with the European Parliament as quickly as possible so that the new structure can be put in place as early as next year. However, the negotiations with the European Parliament will primarily be the responsibility of the Spanish EU Presidency when they take over in the new year.