BRUSSELS — Germany's push to exempt a national champion from future EU oversight could imperil a ministerial deal to integrate the bloc's financial markets and compete with Wall Street. Over the coming days, finance ministers will discuss the most contentious parts of their countries' positions on Brussels' "market integration and supervision package" of bills, or MISP. They'll begin with a dinner on Thursday in Luxembourg, as the Council moves toward its official negotiating position.
The hope is that ministers will then sign off on the compromise deal, brokered by Ireland in its role as leader of the EU's rotating presidency, at the ministerial Ecofin gathering on Friday. This would be a major step forward for the EU's 10-year bid to create a U.S.-style capital market. But a push by Germany to exclude one of Europe’s biggest stock exchanges from central EU oversight could turn dinner into a food fight.
This exemption remains in the current compromise position among EU capitals after Berlin refused to give up local supervision of its stock exchange behemoth Deutsche Börse over fears of job losses and ceding power to a bloc-wide entity, despite central supervision being one of the key tenets of the MISP package. It's sparked protests from smaller countries, which feel the compromise would disproportionately benefit their larger neighbors — and could scupper the entire deal. The carveout is “polluting the whole debate” by giving a “huge gift to Germany” while other countries receive nothing in return for their support, one diplomat said.
"No deal is better than a bad deal," a senior EU official said ahead of Friday's meeting. Securing a deal on MISP this year is central to the "One Europe, One Market" plan that the EU’s three political leaders in Brussels agreed to in April. EU governments have invested significant political capital into MISP in a bid to turn the bloc into an investment hub where innovative companies can find investors without having to leave for deeper pockets on Wall Street.
Getting sign-off from the EU's 27 governments would be a major coup for Dublin, which is chairing legislative negotiations in Brussels until the end of the year. However, six diplomats close to the negotiations gave contrasting views on whether a deal would be possible this week. According to one, anywhere from eight to 17 countries could band together to block an agreement.
The diplomats did concede that the countries opposing the carveout are not unified in their position, however, as they all want different things from a potential deal. But the Deutsche Börse issue remains the most contentious. After the German government made it clear it would not support a deal on the package unless Deutsche Boerse was carved out, the EU’s six biggest economies came up with a plan over the summer to exempt the exchange from EU-wide supervision by the new "supercop" European Securities and Markets Authority.
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