Ireland has ‘nothing to fear’ over push on EU financial reforms, says Martin

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Ireland has “nothing to fear” from a push by a coalition of EU countries to plough ahead with internal financial reforms in the event all 27 member states cannot agree on them, the Taoiseach has said.

However, the Government had reservations about any suggestion that national authorities, such as the Central Bank, should hand over authority to an expanded European regulator, Micheál Martin said.

The EU’s 27 leaders are meeting in Limburg, northeast Belgium, for a one-day retreat, to debate how they might give a boost to Europe’s sluggish economy.

The leader-level meeting at Alden Biesen castle is expected to see something of a clash between France, which favours a more protectionist approach, and countries such as Ireland, Germany and others, which are resistant to moves that might push the US and other economic partners away from the EU market.

Speaking before the informal summit, Martin said Ireland was “positive” about EU reforms intended to make it easier for capital and investment to move around the union’s market.

The proposal to create a “savings and investment union” was first floated in 2015 but made little progress, in a large part because national governments are reluctant to sync differing rules around insolvency, company incorporation and tax, as well as giving greater powers to a European regulator.

Officials in Brussels say the reforms would incentivise people to put money sitting in bank accounts into European investment funds, creating pots of money businesses could raise cash from.

European Commission president Ursula von der Leyen this week suggested governments keen on pushing ahead could decide to link up their capital markets, if the EU could not find a way to unblock the proposed reforms by the end of this year.

The idea of using the EU’s “enhanced co-operation” rules to move ahead in a smaller group would likely need the buy-in of Germany, France and other big states, but also Ireland and Luxembourg, as two smaller countries with large financial services sectors.

“So we’re not necessarily fearful of that, but again a lot depends on the specifics of it,” Martin said on Thursday.

“Ireland believes in a more competitive Europe, a more expanded single market. A deeper savings and investment union ultimately benefits Ireland and we’ve benefited obviously from the single market, so we’ve nothing to fear from enhanced co-operation,” the Fianna Fáil leader said.

In the past, the Government has been wary of talk about centralising the supervision of financial markets. There are fears that handing more power over to the Paris-based European Securities and Markets Authority could see firms and companies based in financial hubs in Dublin or Luxembourg relocate to the French capital, or wherever the EU regulator was housed.

“There are concerns around central supervision: we would have concerns about one single authority,” Martin said. “We are a big player in respect [of] financial services and so obviously that’s something that we would be watching out for.”

All in, there should be some “landing zone” for the internal reforms proposed by the European Commission and von der Leyen, he said.

Martin cautioned against Europe taking a “protectionist” turn in the face of greater economic competition.

French president Emmanuel Macron has been championing a “buy European” idea, where strings would be attached to future EU funding and competitions for state contracts, to ensure more money flowed into certain European industries.

The EU is busy negotiating free trade deals with India and a host of other countries, so putting up barriers to investment from abroad ran “somewhat counter to that”, Martin said.