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Brexit was always going to trigger a period of uncertainty and change for the other 27 Member States (EU-27). The loss of the UK influence in the Council alone has set many small liberal economies and non-euro area Member States adrift from their political moorings as they try to find their way in the new Franco-German dominated landscape.

Since Emmanuel Macron’s election in France, the French have been in the singular ascendancy these past few months in Brussels, perhaps justifiably so as the only big Member State Government to have contested and won a national election with an openly pro-EU agenda. The Macron agenda dovetailed neatly with a renewed reformist zeal in the European Commission and while both the German and British effectively side-lined, there have been a number of highly ambitious centralizing proposals from the Commission.

In the financial services area, the Commission has proposed to further centralise supervision of the sector via the three European supervisory authorities (ESAs) for banking (EBA), securities and financial markets (ESMA) and insurance and pensions (EIOPA). The Commission explained their ambitious approach as necessary to prevent regulatory arbitrage among jurisdictions competing to attract financial services firms relocating from London and to support the badly needed greater integration of European capital markets (‘Capital Markets Union’) in the run-up to the UK’s departure.

This past Wednesday, EU Economics and Finance Ministers (ECOFIN Council) discussed the Commission’s proposals in a public session. The result was widely anticipated as Member States have never been keen on ceding power to the centre (particularly in this case when they would retain fiscal responsibility) and a substantial majority of them had made their concerns known to the Commission months in advance of the proposal’s formal adoption on 26 September.

In the ECOFIN discussion, only France expressed vocal support for the Commission’s proposals, supported by the Netherlands. Among the other fifteen Ministers who took the floor, views ranged from specific concerns to broader convictions that the Commission’s proposal is “unnecessary,” “would only add complexity, bureaucracy and cost, “ and generally “does not go in the right direction.”

In terms of what happens next, the ESAs review proposals will continue their meandering through the EU legislative process with the understanding that they will be heavily modified in the Council. This process will not be concluded quickly, if it is concluded at all. In this way, the ministerial debate on financial supervision was entirely symptomatic of the broader discussions around the future of Europe: a high degree of consensus is essential, and progress will range from incremental (best case scenario) to zero without measured and effective leadership in the EU Institutions. Which many in Brussels are hoping will be facilitated by the return of a new German Government at the end of this year.