The House of Lords EU Economic and Financial Affairs and International Trade Sub-Committee has today launched an enquiry into the future of economic governance in the European Union. The Committee are inviting written evidence from any interested parties.

The Committee recognises that the stability and economic health of the Eurozone is vital to the UK’s economy, and the inquiry comes as the European Commission has outlined proposals to develop greater economic coordination in the EU and Herman Van Rompuy, president of the European Council, has set up a task force on economic governance. It is expected that various legislative and non-legislative proposals will be brought forward on issues related to economic governance throughout 2011.

Questions the Committee will be asking include:

•What flaws has the recent fiscal crisis in Europe exposed in the current system of economic governance?

•Is greater economic coordination necessary or desirable for economic stability in the EU?

•Should greater coordination take place across the EU or simply within the Eurozone?

•How might a reform of economic governance in Europe affect the role of national parliaments and governments?

•What is in the UK’s national interest in relation to the reform of economic governance?

The Committee will also consider the four areas the European Commission have been focusing on so far in their proposals; the Stability and Growth Pact; surveillance of macroeconomic imbalances and competitiveness; coordination of fiscal and structural policies; and, a crisis resolution mechanism.

Commenting, Lord Harrison, chairman of the Lords EU Economic and Financial Affairs and International Trade Sub-Committee, said:

“The recent financial crisis has focused minds in Europe on the need for better economic governance. The European institutions are bringing forward a range of suggestions for approaching the issue but it is important any changes are properly considered and do not have unintended negative consequences.

“The Sub-Committee has already done important work on EU proposals for regulating Alternative Investment Fund Managers, and derivatives markets, and this inquiry will continue that process.

“It is particularly important for the UK that regulation in Brussels doesn’t make the EU uncompetitive in the global financial services industry given the UK’s heavy dependence on that sector.”

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