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European Financial Services Proposals

I am sure that the hon. Gentleman would not expect me to answer that question on the Floor of the House when the Chancellor is going into negotiations tomorrow. I will not second-guess or pre-empt those negotiations. As I said, it was agreed at the June meeting that day-to-day supervision and crisis management arrangements had to remain national, as only national Governments can provide any fiscal support to firms. In the case of credit rating agencies, which cannot have a fiscal impact if they fail, there could be central supervision. As a result, it is clear that there can be no direct European crisis management powers over firms, or other powers that undermine national supervision. Furthermore, it has been made clear that the new framework should not impinge on member states' fiscal responsibilities. We must ensure that member states stick to that agreement. I am sure that hon. Members will have noticed that, in some areas, the Commission's legislative proposals go further than what was agreed in June. For example, it is proposed that the new EU supervisory authorities could later directly supervise Community-wide entities. That clearly does not respect the June agreement, and the Government are absolutely clear that we cannot accept it, as it could fundamentally undermine national supervision. Furthermore, the Commission's proposals include direct European powers over firms, in particular in crisis management. Such a role could confuse and undermine national crisis management, and it is clearly critical to ensure that Governments can respond quickly and effectively in times of crisis, so that needs to change.