The European Commission (EC) is the executive branch of the 28-member European Union (EU) and is mainly responsible for proposing legislation to its parliament, implementing its decisions and administering its budget. The EC also produces research such as economic forecasts aimed at assisting the EU in its decision making processes.
The EC consists of 28 individuals (commissioners), one from each of the EU's member states, who are appointed every five years. They are charged with acting not in the interest of their own state but in the interest of the EU as a whole. The term of the current EC and its president, Jean-Claude Juncker of Luxembourg, expires in October, 2019. The EC is located in Brussels, Belgium. The EC is divided into 24 separate 'super-ministries' known as Directorates-General, each supervised by an EU bureaucrat who reports directly to the EC. They administer policy areas ranging from agriculture and rural development to education and culture to transport and energy. It also contains 12 separate offices that deal with a range of bureaucratic responsibilities such as humanitarian aid and European anti-fraud.
In December 2019, the European Commission's executive vice-president Valdis Dombrovskis said that Brussels was ready to cut off the City of London’s post-Brexit market access, though it is prepared to give Britain market access via a system of “equivalence” decisions, similar to rules used by banks and brokers in countries like the U.S. and Singapore to gain access to European markets.
In 2008, EC created a stir by releasing an economic report indicating that economic growth within the euro zone (states that have adopted the EU's common currency) will slow considerably and even stall completely until at least mid-2009 and in some cases longer. The report prompted a debate within member states about whether co-ordinated, EU-wide action or national responses were the appropriate response to the forthcoming economic difficulties. The EC report also estimated that euro-zone GDP declined 0.2 percent in the second quarter of 2008, 0.1 percent in the third quarter and predicted a further contraction of 0.1 percent in the fourth, thereby meeting the technical definition of a recession.
Regulatory Agreement with the CFTC
The European Commission and the U.S. Commodity Futures Trading Commission in February 2016 announced a "common approach" to clearinghouse requirements that would pave the way for European regulators to grant equivalence to U.S. clearinghouses. The agreement would allow European CCPs to do business in the U.S. more easily and U.S. CCPs to continue to provide services to EU companies. The deal will also result in millions of dollars of savings daily in the amount of collateral derivatives dealers are required to post.
The European Commission will propose the adoption of an equivalence decision, which will need to be approved by the Member States of the European Union. That vote is expected on Feb. 24. The Commission expects that U.S. CCPs will be recognized by June 21, the date when the mandatory clearing obligation for interest rate swaps starts to take effect.
The agreement is the culmination of three years of sometimes bitter talks over common standards for the global derivatives markets mandated by world leaders after the 2008 financial crisis.
- The European Commission. European Union.
- The Commission. University of California Berkeley.
- EU chief issues Brexit warning over City of London access. Financial Times.
- EU Said to Probe High-Frequency Securities Trading. Bloomberg.
- Euro Zone To Honor Budget Rules As Econ Faces Stall. Reuters.
- Joint CFTC and European Commission Statement. Europa.
- FIA Welcomes US-EU accord on CCP equivalence. FIA.
- EU and US strike derivatives regulation deal. The Financial Times.