On Tuesday 5 March European finance ministers, meeting in the Ecofin Council, will discuss the tentative compromise reached last week between the European Commission, the Council and the European Parliament on the Capital Requirements Directive. This includes a controversial proposal to cap bankers' bonuses a no more than 100% of their annual salary, or 200% with shareholder approval. The UK government has announced it will oppose the compromise. What are its chances of blocking a deal?
Although the Council will not be asked to vote formally tomorrow, the Irish Council Presidency will want to establish whether its tentative deal with the European Parliament has the support of a qualified majority of EU Member States. A qualified majority is reached if:
In addition, a Member State may ask for confirmation that the votes in favour represent at least 62 % of the total population of the Union.
The UK holds 29 votes. In order to block the compromise, it needs an additional 62 votes. Use the Council's voting calculator to see how this blocking minority can be reached: http://www.consilium.europa.eu/council/voting-calculator. Under qualified majority voting, an abstention has the same effect as a 'no' vote, as it does not contribute to reaching the threshold required for a measure to pass.
Although EU governments rarely take a decision on economic and financial issues until all of them agree, there have been instances where proposals have been put to qualified majority voting. Since 2009 Ecofin has adopted 44 legislative proposals. Out of a total 1188 votes cast during this time (44 proposals * 27 Member States), there were only 5 'no' votes ('against' or 'abstention'). These 5 votes were cast by the UK (2), Germany, Portugal and Finland (1 each). Click here to see who has been in a minority in the Council on economic and monetary affairs issues.
One decision which the UK opposed while all other Member States supported it, was the regulation on short selling, designed to combat speculative financial trading. Click here to see the vote in Council. The Council vote was mirrored in the Parliament, where the proposal was passed by large majority, with most Conservative and LibDem MEPs abstaining. Click here to see the vote in the European Parliament.
The UK was more successful on the proposal for a Financial Transactions Tax (FTT, Tobin or 'Robin Hood' tax). In the absence of a qualified majority for this proposal in the Council, it was never put to a formal vote - a de facto rejection. Instead, eleven Member States were given permission by the Council to forge ahead and draw up their own plans for an FTT, under the so-called enhanced co-operation procedure. Interestingly, the position taken by Eurozone MEPs belonging to governing parties turned out to be a good predictor of whether their government would opt to join the enhanced co-operation procedure (click here to see the comparative table).
What should we expect?
Based on the Council's voting record on economic and monetary affairs issues since 2009 and the publicly stated positions of Member States, as well as the fact that it would be highly unusual for the Council to go back on a deal reached with the European Parliament, the tentative compromise reached between the EU Council and the Parliament last week is likely to be approved - albeit possibly with minor changes and with certain Member States expressing reservations. If the UK maintains its opposition, it is likely to be outvoted.
In the European Parliament, which must also still give its final agreement to the compromise proposal, the so-called Tobin tax initially did not enjoy much support. But mounting public anger following the 2008 financial crisis caused a change of heart. The biggest change occurred within the largest political group, the European People's Party (EPP, also the largest party in the Council). Although it voted against the FTT in several non-binding votes in 2011, most EPP MEPs finally supported the tax in May 2012, when the legislative vote was held. Click here to see the evolution in MEP positions on the FTT in the European Parliament.
For further information, please contact Doru Frantescu, VoteWatch Europe policy director, firstname.lastname@example.org, tel. +32 472 65 79 24.
VoteWatch Europe AISBL is an independent, non-partisan, not-for-profit organisation registered in Belgium. It is funded by grants from the Open Society Institute and the Joseph Rowntree Charitable Trust. It receives in-kind support from Burson-Marsteller and White and Case.
VoteWatch Europe, the independent organisation which monitors decision-making in the EU Institutions, presented on 25 January 2013 a special report on Bicameral politics at the EU level: How the votes of MEPs compare with those of Member States. It is the most comprehensive report of its kind to date.
Among the key findings of the special report published today are:
-Legislation backed by a centre-right majority in the Parliament is almost always adopted by the Council. Sometimes legislation backed by the centre-right in the Parliament is also supported by centre-left governments that disagree with their own MEPs. This has been the case notably in the areas of economic and monetary affairs, industry, research and energy, and international trade.
-Conversely, legislation backed by a centre-left majority in the Parliament faces stronger opposition in the Council, particularly in the areas of environment and public health, civil liberties and gender equality.
-The 'left versus right' dimension is not the only determinant of bicameral politics in the EU. For example, on EU spending policies (regional development, agriculture, and budgetary policies), national interests tend to dominate legislative bargaining.
-ECR Group MEPs representing the Czech Civic Democratic Party (ODS) and the British Conservatives disagree most with their respective national governments. They are followed by some of the parties in the EPP Group (Swedish Moderate Party, German CDU), the ALDE Group (Dutch VVD) and the S&D Group (Austrian SPÖ). All these parties form part of coalition governments, and their coalition partners often support their respective government's positions.
-The policy areas where MEPs and their governments have disagreed most since 2009 are budgetary issues and economic and monetary affairs.
You can find the full report here.