Examination of Witnesses (Questions 40-54)
DR KERN
ALEXANDER, DR
JON DANIELSSON
AND PROFESSOR
RICHARD PORTES
CBE
3 NOVEMBER 2009
Q40 Mr Fallon: Have you read Article
23?
Professor Portes: Yes.
Q41 Mr Fallon: It seems pretty clear
to me that a Member State can appeal and then the Council acts
by qualified majority as to whether to uphold the appeal or not.
Is that not the position?
Dr Alexander: I think the dispute
here that Article 23 refers to is if a Member State says, "We
think this decision by the European supervisory agency is impinging
on our fiscal position in some way and therefore we contest that",
and the ESA says, "No, it does not. We are simply adopting
a rule. In the code book it says you have got to regulate your
banks in this way", and so they can appeal and they can appeal
to the Commission, to the Council of Ministers ultimately.
Q42 Mr Fallon: But they could lose
the appeal. The Council can decide by qualified majority to reject
a Member State's appeal.
Dr Alexander: Because the determination
was that it does not impinge on the fiscal requirement for that
Member State. I would say as a lawyer looking at this—
Q43 Mr Fallon: I just want to be
clear. The final say is for the Council, not for the aggrieved
Member State that thinks it does impinge on its fiscal responsibility.
The final decision is for the Council.
Professor Portes: To impose any
specific fiscal burden on any specific Member State. It is a decision
about a regulation and, in the end, if that regulation were ultimately
to be interpreted as imposing a specific fiscal burden on a specific
Member State it would not apply; it could not apply in the rest
of the legislation. I am sorry; we are not here talking in that
Article to which you refer about the power to impose a fiscal
responsibility on a Member State.
Q44 Mr Fallon: I think you ought
to look at it again. Let us come back to Article 21 that Mr Love
referred to. You rather dismissed this but the European Banking
Authority, once it has had the warning from the Systemic Risk
Board, it says, "shall decide on the actions to be taken".
There is no Article 23 safeguard for the exercise of the European
Banking Authority's powers under Article 21, is there? Have you
read Article 21?
Dr Alexander: Yes; I have got
it right here. What provision are you referring to, "The
authority shall co-operate closely with the SRB"? Yes. "They
shall provide the SRB with regular up-to-date information".
Q45 Mr Fallon: The second paragraph
of number 4, "It shall decide on the actions to be taken".
Dr Alexander: Article 21, paragraph
2 or 4?
Q46 Mr Fallon: Four.
Dr Alexander: "On receipt
of a warning or recommendation from the SRB addressed to the Authority,
it shall convene a meeting of the Board supervisors and assess
the implications of such a warning or recommendation. It shall
decide by the relevant decision-making procedure the actions to
be taken in accordance with the powers conferred upon it by this
Regulation".
Q47 Mr Fallon: Yes, I have just read
that to you—"It shall decide on the actions to be taken".
That power is not subject to the safeguards clause in Article
23.
Dr Alexander: Why do you say that?
Q48 Mr Fallon: Because 23 only refers
to the power under Articles 10 or 11.
Dr Alexander: Yes, and your concern
is that there may be a decision here regarding fiscal responsibilities.
Q49 Mr Fallon: It is not a question
of concern. I am just asking you whether that is legally the position.
As drafted at the moment the safeguards clause does not apply
to an action taken under Article 21. Is that correct or not?
Dr Alexander: I think that Article
23 safeguards can be applied to Article 21 too.
Q50 Mr Fallon: But it does not say
so.
Dr Alexander: No, not expressly.
It should be clarified. I would say that safeguards are regarding
fundamental powers of Member States in the European Union regarding
fiscal powers and you cannot derogate from that unless it is expressly
derogated from in the EU law or in the provisions, and so this
would not be interpreted to impinge on the fiscal authority of
the Member State, but I think you are right for pointing it out.
It should be clarified.
Q51 Mr Fallon: There does not seem
to be an appeal power at all for Article 21 decisions.
Dr Alexander: There is an appeal
power regarding all decisions made by the European Supervisory
Authority to the Board of Appeal. Any Member State or a financial
institution that is affected by a decision by the ESA may appeal
to the Board of Appeal and then on to the Council of Ministers.
In the explanatory note that is stated.
Q52 Mr Fallon: We were talking about
the Banking Authority, not the Systemic Risk Board.
Dr Alexander: No, I am talking
about the European Supervisory Authority. Every decision they
make by qualified majority voting that affects either a Member
State authority or a financial institution directly they can appeal
to a Board of Appeal and on to the Council of Ministers. The explanatory
note says that, but that is a good point.
Q53 Mr Fallon: It might be clearer
if Article 23 specifically covered Article 21.
Dr Alexander: Yes, I agree.
Q54 Mr Fallon: And 10 and 11.
Dr Alexander: It should be clearer,
exactly.
Chairman: The search for clarity continues.
Thank you very much.
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