BRUSSELS, June 29 (Reuters) - Belgium assumes the rotating six-month presidency of the European Union from July 1, with financial regulation and economic coordination its priorities.
After Spain’s six months at the helm were largely taken up with managing the fallout from Greece’s debt crisis, and the knock-on effect on the rest of the bloc and on the euro, Belgium lookeed set for a less frenetic stewardship.
But that will depend in part on whether financial markets give a breather to Spain, Portugal and other countries with high deficits and rigid labour markets, and whether measures such as EU bank stress tests provide reassurance or yet more angst.
It will also depend on how efficiently Belgium can coordinate the work of 27 countries while operating with a caretaker government following inconclusive elections this month. A new government may not take office for months.
It is not the first time Belgium has been through such a period of uncertainty domestically and it is not expected to affect its EU presidency. However, it could complicate planning of economic and financial meetings, since Belgium’s stand-in finance minister may not be appointed to the next government.
Caretaker prime minister, Yves Leterme, will be in Congo marking its 50th anniversary of independence on the day his country takes over the presidency. He dismissed any concern about Belgium’s commitment however, noting that as a founder member of the EU it had held the presidency 12 times already.
HEDGE FUNDS AND WATCHDOGS
Belgium’s goals include passing new rules on hedge funds, the creation of new finance industry watchdogs, and an agreement on better economic cooperation across the EU.
Months-long talks on hedge fund rules broke down last week, meaning a deal is now unlikely to be struck before October, but a deal could come as soon as this week on three watchdogs to oversee banks, the insurance industry and financial markets. With the passage last year of the Lisbon treaty, which was designed to streamline EU decision-making and shape a common foreign and security policy, the EU now has two top officials to drive those issues — European Council President Herman Van Rompuy and the EU foreign affairs chief, Catherine Ashton.
Since Van Rompuy is a former Belgian prime minister, he is expected to work closely with Belgium’s caretaker government in ensuring the presidency’s goals are met, particularly when it comes to "economic governance", a term which refers to EU governments working more closely on coordinating policies.
Van Rompuy, who heads a task force of EU finance ministers who are looking at how to overhaul some of the EU’s economic-policy architecture, is expected to present his findings in October, when Belgium is also hoping to unveil its own plans for how EU nations can work better on economic policy.
On foreign affairs, Belgium’s presidency will leave the bulk of the agenda in Ashton’s hands, with the priority on finalising the structure of the External Action Service, a new diplomatic corps being established to serve the EU’s member states abroad.
