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Oral question with debate concerning the follow-up after the review of the Lamfalussy process – Statement by State Secretary Janez Lenarčič on behalf of the EU Council

Honourable Chair of the Committee on Economic and Monetary Affairs, Ms Pervenche Berès, distinguished Members of the Parliament,

Allow me to stress the Presidency's opinion that the crucial response to the current situation in the financial markets should be to consistently implement the three work programmes as already adopted in the Council under the Portuguese Presidency.

As you will remember, last October the Council in the ECOFIN configuration adopted a report and a set of Council conclusions as mentioned in the Oral Question. A roadmap has been attached to these conclusions: Allow me to briefly recall the main directions of our work.

The first one concerns the procedures and principles to enhance cooperation and actions in cases of cross-border financial crises. One of the key objectives is the finalisation and signature of a new Memorandum of Understanding, which will provide common principles and guidelines for enhanced cooperation in the field of crisis management. The Presidency anticipates that the Memorandum would be finalised on the occasion of the ECOFIN Council informal meeting to take place next month in Slovenia.

The other main direction of work in the field of financial stability arrangements concerns the tools for crisis prevention, management and resolution. The October roadmap actually comes to grips with all the identified difficulties, namely: state aid rules, deposit guarantee schemes, winding up rules and limitations to asset transfers – all this in a cross-borderdimension.

I would now like to touch briefly upon the conclusions adopted in December by the ECOFIN Council on the Lamfalussy process review and the attached roadmap. On some issues, this topic is linked to the work on financial stability, yet long-term questions relating to the supervision of cross-border financial groups do not have much to do with the current situation in the market. This situation namely concerns mostly the national supervisors and requires their adaptation under the circumstances of permanent evolution of the financial markets. Nevertheless, we should reiterate that, in order to ensure equal competitive conditions, increased convergence is needed in the area of supervision, referring particularly to the convergence of supervisory practices and not necessarily to the convergence of supervisory authorities.

With regard to the response of the economic policy actors to the current situation in the financial markets, I would like to point out that, as far as the Council is concerned, the primary responsibility for corrections lies with the private sector. Only if the latter should prove as incapable of taking efficient steps, it would be our turn to come up with legislative proposals.

The ECOFIN Council discussed the issue of financial stability at its recent meeting on 4 March. In the coming two days, this issue will also be addressed by the European Council and I hope it will approve of the progress made. The ECOFIN Council will continue to monitor the situation closely. Already in a few weeks, the informal meeting of Finance Ministers and Central Bank Governors in April will continue the examination of the economic situation and of the progress in the area of supervisory convergence.

The Presidency would now also welcome an indication of the Parliament’s views on this matter.

Thank you.

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Date: 12.03.2008