The European Union key developments

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The European Union key developments
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European Commission

• 25 Commissioners
• Initiates legislation not a regulator
• More responsive to industry and citizens
• EU Parliamentary oversight
• Danuta Hübner Commissioner of regional policy
• Agenda 2004-2009
• - 7 year EU budget (EUR 1000bn)
• - functioning of 25 EU region via new
  commissioners
• - stability growth pact
• - larger profile in the world stage
• - asylum immigration policy
• - FSAP and Lisbon Strategy
• - relations with USA
• - new EU Constitution

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EU Parliament

• 732 MEPs (Poland 54) from 628 in 1999-2004
• Strasbourg and Brussels seats
• Joint-powers to pass legislation (with EU
  Council)
• Functions on basis of 20 thematic committees
• - cross-party/cross-national
• - Committee of Economic Monetary Affairs
• - tax competition
• - post-FSAP
• - Basle II (capital adequacy)
• - IAS/ISA

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Polands presence in EU Parliament

• Bronislaw Geremek most respected
• Bogdan Golik not enough lobbyists in Brussels
• Jerzy Buzek and Alojzy Peterie ex-PMs
• Janusz Lewandowski chair/EP budget commit.
• Jacek Saryusz-Wolski and Janusz Onyszkiewicz are
  both vice-presidents of the EP
• Of 162 new MEPs only 14 out of 75 positions
  on the EP Assembly 4 governing bodies
• But7 of these MEPs are Polish!

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FSAP

• create single market for risk capital and all
  financial markets by 2005
• 42 separate legislative measures (39 approved)
  but divergent implementation at national level
• two impediments
• - over-regulation
• - uneven application of rules

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Key priorities

• Introduce annual corporate governance statements
  for listed companies
• Legislative framework to help shareholders to
  exercise their rights
• EC Recommendation
• - role of NEDs
• directors remuneration
• EC Corporate Governance Forum co-ordinate
  national codes

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EU financial regulator

• Committee of European Securities Regulators
  (CESR)
• EU Financial Reporting Advisory Group
• Accounting Review Committee (EC)
• Lamfalussy Procedure
• - Level 1 broad legal framework
• - Level 2 and 3 detailed rules and
  regulations too much detail?

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The Lisbon Strategy

• most competitive and dynamic knowledge-based
  economy in the world
• Critical emphasis on building entrepreneurship
  culture
• - cut red tape
• - encourage more risk
• - amend tax and regulatory framework
• - improve access to finance

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What went wrong?

• Financial services and other services (70 of EU
  economy) borders still matter!
• Diverse and over-ambitious goals last-minute
  additions
• - economic reform
• - environment/social protection
• blurred priorities!
• EU economic renaissance lies also in national
  capitals many have failed to offer the
  deliverables.

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8th Directive

• Robust oversight over auditors with EU
  co-ordination structure chaired by the EC
• External quality assurance
• Auditor independence options
• - prohibit provision of non-audit services
• - self-assessment safeguards
• Also, independence re-inforced by
• - audit committees
• - audit firm rotation

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Thank you