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November 23, 2012 4:58 pm
Political negotiations to overhaul Europe’s markets are set to be pushed into 2013 after Cyprus, which holds the rotating EU presidency, dropped plans to discuss them at meetings in December.
The move to drop discussions of the Markets in Financial Instruments Directive (Mifid) from the agenda on ministerial meetings in Brussels next month comes after talks to finalise the European Union budget collapsed.
An email sent by the Cyprus presidency on Friday, and seen by the Financial Times, said Mifid would not be discussed at either a meeting of economic ministers or one for Union’s national ambassadors.
It also potentially further delays wide-ranging reforms to financial markets in the region at a time when similar legislation in the US is close to implementation.
The review of Mifid, Europe’s key legislation governing markets, has grown from a directive designed to encourage competition to a regulation looking to safeguard markets from systemic risk.
However, many of the proposed measures have been highly controversial. Plans to tighten restrictions on banks’ trading activities and introduce greater competition between clearing houses have divided markets participants, while others have pointed out inconsistencies with other European initiatives, such as anti-monopoly policy.
Cyprus had been pushing for agreement between the Council of Ministers by the end of the year, so the process could move to trialogue between the Council, European Commission and parliament. The negotiations settle on a final text that becomes legislation.
However, lobbyists and politicians in Brussels had privately admitted it was a tough goal as the council was preoccupied with the European Banking Union. The collapsed talks over the EU budget has forced the tight schedule to be redrawn.
“Talk won’t take place until February or March in my view,” said one observer, who declined to be named.
The delay will push responsibility for discussions on to Ireland, which takes the presidency in January.
In a speech last week Kay Swinburne, a member of the parliament’s committee on economic and monetary affairs, estimated that the most likely date for implementation of Mifid II was January 2015
“The sheer size and the number of issues that we will have to discuss means that this could take quite a while,” she acknowledged.
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