The onset of the trilogues this year have been marked by unusually high levels of optimism that a deal on Omnibus II will be reached. Much of this is driven by the desire wrap things up before the European Parliamentary elections in May 2014.
A new Parliament means personnel changes not only in the ECON committee but also a new Commission and Council. Getting a deal before the end of the year is therefore seen as crucial by all three trilogue parties and the election is being referred to as “the sword of Damocles” hanging over the negotiation table.“They just want to get it done”
The readiness to wrap the file up is notable when talking to people in the Parliament. “Parties are no longer at each others’ throat about it,” an EP source said, describing the mood among MEPs. “They just want to get it done.”
Second Quick-Fix Directive
The first two trilogues were undertaken in a spirit of cooperation and completion, according to a number of people present in the room. All the parties have expressed their commitment to getting a quick resolution.
LTGA dispute
While there is a general consensus to “get the thing done” and an agreement on a second Quick-Fix Directive is likely, there is still a fly in the ointment – the LTGA. The initial indications were that the Commission has broadly endorsed the EIOPA recommendations while industry said they do not go far enough. It is now clear that Member States are unhappy too. “The situation is that after we agreed that EIOPA will produce a balanced proposal based on facts and figures the Council came [to the last trilogue] with no mandate but rather with an open wish list of all the different insurance sectors in the different Member States,” Sven Giegold, MEP and Coordinator of The Greens/EFA in the ECON committee, told Solvency II Wire in an interview. “And as usual in this file the position of the key Member States is more or less unfiltered. [It is] the wish list of their respective industries.” The Council has questioned some of EIOPA’s findings. A few sources said that at the last trilogue the Council pointed to the fact that the 20% Volatility Balancer had no clear justification and Member States wanted to know what the figure was based on.The “Lithuanian compromise”
The Presidency has apparently already circulated a new draft Omnibus II text which is being referred to as “the Lithuanian Compromise”. Details of the text are revealed in the programme of a recent industry think-thank event.
No mandate to negotiate
The fact that the Council has been turning up to the trilogue negotiations for the past two years without a mandate to negotiate from Member States is cause for huge frustration to the other parties.“If you want to wrap up something you must have a counter-part,” Mr Giegold said. “At the moment the Council is a counter-party risk, you could say.”