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The EU should introduce double majority voting, whereby a majority is needed amongst both Eurozone and non-Eurozone countries, for a decision to pass. This will prevent an unfair advantage for Eurozone countries and a fragmented single market.
13 October 2012
The Eurozone will in future have greater incentive to take a common position on banking matters, unlike non-Eurozone countries. First, to avoid free riding on future potential joint backstops for banks, a greater degree of regulatory harmonisation within the Eurozone may be needed, which could spill over to the single market. Secondly, under the EU’s new voting rules, the Eurozone will have an inbuilt majority in EU decision-making from 2017, including in the EU’s financial supervisors such as the European Banking Authority.
To avoid the balance of power at the European Banking Authority (EBA) being tipped in favour of the Eurozone, much stronger safeguards are needed than those that were originally proposed by the European Commission. Instead, Open Europe’s principle of ‘double’ Qualified Majority Voting (QMV) should be introduced. At the request of one national supervisor, this would see two separate votes taking place when the EBA considers a key decision: one amongst euro countries and a separate one amongst non-euro members. If a weighted majority cannot be achieved in both groups, the proposal should fall.
This would deter Eurozone caucusing and establish a positive principle for how to safeguard the single market in financial services more broadly. It should therefore be in the interest of both Eurozone and non-Eurozone members.
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