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EU financial market chief backs Merkel's trade plan

Charlie McCreevy, the European Union's financial markets chief, backed German Chancellor Angela Merkel's proposal for more open trans-Atlantic trade.

Merkel suggested reducing trade barriers with the US last month as she took over the rotating leadership of the 27-nation European Union and the Group of Eight biggest economic countries. The initiative would build on five years of talks between the EU and US to whittle away differences in financial services rules. „Initiatives like the Merkel initiative provoke new thinking,” McCreevy told a Brussels news conference yesterday. „In a globalized world, we have to find new ways of doing things.”

McCreevy, a former Irish finance minister, told EU lawmakers earlier this week he will visit the US next month to discuss rules on accounting, securities, banking and insurance. McCreevy didn't specify how he would introduce Merkel's plan into the US negotiations. The EU is working with the US on a plan to recognize each other's accounting rules, letting companies list their shares on both sides without having to keep two sets of books.

McCreevy also is pushing US regulators to make it easier for foreign companies to exit US markets, and to implement a global overhaul of capital rules for banks. McCreevy is pressing US state regulators to let European reinsurers do business in their markets without posting collateral or being subject to local supervision. The projects are part of a 5-year-old „Financial Markets Regulatory Dialogue,” which was spurred in part by a dispute over corporate governance rules enacted by the US after the bankruptcy of Enron Corp.

McCreevy, who overseers internal market matters at the European Commission, also presented a report showing EU governments improved their performance during the past half year in enacting the region's business and market laws. Italy held its place as the country sanctioned the most for breaching EU rules. As of January 11, the country faced 161 warnings or lawsuits, either for failing to enact required measures or maintaining local laws running counter to EU decisions. Spain was second with 109 such cases.

Estonia was the least cited, subject to 11 open procedures. McCreevy said only two countries - the UK and new EU member Bulgaria - met Wednesday's deadline to enact an overhaul of securities rules known as the Markets in Financial Instruments Directive. He expects Ireland to finish its work next week. Last week, he said other countries would be delayed only „a short time.” The rules are due to take effect November 1. „It's worrying,” McCreevy said of the pace of governments writing Mifid into national laws. „The longer they take, the more likely that these countries won't hit the November deadline.”(Bloomberg)