BRUSSELS — Britain’s chancellor of the Exchequer, George Osborne, signaled the government’s allegiance to the European Union on Tuesday, endorsing a clutch of new watchdog agencies to supervise financial activities across the 27-country bloc.
But Mr. Osborne insisted that he had successfully defended Britain’s fiscal sovereignty and shielded the country’s important financial sector from overly burdensome E.U. regulation.
“We welcome the creation of architecture at the European level that can coordinate national supervision,” Mr. Osborne said in Brussels, where he was meeting with his fellow E.U. finance ministers.
“But we were obviously concerned,” he said, “that the interests of the British taxpayer were protected, that the voice of London was heard, and that we did nothing that would undermine the competitiveness of Europe.”
The E.U. finance ministers agreed Tuesday to create agencies overseeing insurance, banking and market trading, as well as a European Systemic Risk Board to watch for asset bubbles and other dangers to the financial system.
Those measures, which still need approval by the European Parliament before the agencies begin work in January, represent the biggest step the European Union has taken so far to prevent a recurrence of the debt and banking crises that have threatened the region’s economic stability.
Governments had shown the willingness to “put behind national interests for the sake of Europe,” said Wolfgang Schäuble, Germany’s finance minister.
Mr. Osborne said he had sought to ensure that individual finance companies would be regulated by existing British agencies, that the banking agency was based in London, and that the British government could report its budget to its Parliament first — and only then to European authorities —as part of a so-called European Semester system.
While supporting the Europe-wide effort on risk management, Mr. Osborne also dug in his heels on an issue dear to his Conservative Party — and to Margaret Thatcher when she was prime minister in the late 1970s and 1980s — by insisting on preserving a rebate to the British Treasury on agricultural spending worth about £3 billion, or around $4.6 billion, each year.
The rebate is supposed to make up the shortfall between what the U.K. pays toward the E.U. budget and what it gets back, but a senior member of the European Commissionsaid in recent days that the British rebate was no longer justified as Britain was more prosperous than during the 1980s. Mr. Osborne said the people who called the rebate into question would “be wasting their time.”
Mr. Osborne also acknowledged that Britain would need to defend its interests at the European Systemic Risk Board in the coming years. The agreement reached Tuesday appoints the president of the European Central Bank, which oversees monetary policy in the euro zone, as the leader of the risk board for the first five years of its operations.
Mr. Osborne said the selection process for the board would be reviewed in the next three years, opening up the possibility that someone from Britain, which is outside the euro zone, could one day hold the post.
There was less clarity Tuesday about proposals for an E.U. system of bank taxes to help protect taxpayers from footing the bill in future crises.
Ministers failed to agree on that measure, with the British insisting on the right to do what they wanted with the revenue and Germany seeking to channel the revenue into a network of emergency funds.
Ministers also failed to agree on two other forms of taxes on financial transactions and on financial activities: a levy on share and bond purchases, and on banks’ earnings and pay.
Mr. Osborne said there were serious practical impediments to applying a financial transaction tax — a view echoed by the French finance minister, Christine Lagarde, whose country was previously one of the strongest advocates of such a tax.
Source: New York Times