The European Council adopted last week a political guideline for continuing negotiations with the European Parliament on the reform of financial supervision in Europe. At this point it has to be stressed that in view of the adoption by the US Senate of similar legislation, to  better  control the American banking system, the European Union has to move to the same direction. As everybody knows Europe has done nothing so far to introduce stricter rules on the financial sector, despite the fact that the US has already adopted a number of corrective directives.

The package of proposals of the Council is intended to reform the European framework for supervision of the financial system in the wake of the global financial crisis. In particular, this involves the creation of a European Systemic Risk Board and three European supervisory authorities for the banking, insurance and securities sectors. It is intended that negotiations with the Parliament will allow these new bodies to be established on 1 January 2011. The Council established also the broad economic policy guidelines under the new Europe 2020 strategy. In the context of initiatives under way with the aim of improving the economic governance of the European Union, it gave the go-ahead for the introduction of a "European semester", for the surveillance of the budgetary and structural policies of the Member States.
The Council also opened excessive deficit procedures in relation to Bulgaria, Cyprus, Denmark and Finland, making recommendations on the measures to be taken to reduce their deficits to below the reference value of 3 % of gross domestic product.

Twenty-four of the 27 Member States are now the subject of the excessive deficit procedure, a circumstance which should be seen in the context of the global financial crisis and the economic slowdown in 2008 and 2009. In this situation, the EU stability and growth pact (which includes the excessive deficit procedure) is the framework supporting the policies of the Member States, for a rapid return to sound fiscal positions.

The Council has also completed the legislative procedure relating to the SWIFT agreement, by concluding an agreement with the United States on the transfer of financial messaging data for the purposes of the Terrorist Finance Tracking Program.