The European Commission chief failed to face down her first real challenge from a member of her top team.
BRUSSELS — Queen Ursula might just be losing control of her courtiers.
The all-powerful “Queen” of Europe, Ursula von der Leyen, is already facing rebellion from within her own ranks, with her controversial deregulatory drive meeting pushback from top officials in her administration.
Four European Union officials, granted anonymity to speak freely, told POLITICO that the European Commission chief failed to face down her first real challenge from a member of her top team, financial services czar Maria Luís Albuquerque, who fought this week to prevent a key finance policy from being nuked.
The Brussels financial bubble was shocked when open finance rules ended up on the Commission’s infamous kill list for legislation — and even more shocked when, the next day, they mysteriously vanished.
Officials say von der Leyen underestimated Albuquerque on the standards relating to financial data, known as FiDA, as the Commission president seeks to cut the EU’s red tape amid the bloc’s drive for competitiveness in the face of challenges including a new United States administration and sluggish economic growth.
“Albuquerque fought hard to keep FiDA even though [von der Leyen] wanted to withdraw it … so far it is surviving,” one EU official said.
“FISMA and Albuquerque were not in favor of withdrawal,” a second official reported, referring to the EU’s financial services directorate. “Albuquerque was pissed off.”
For a Commission president who has been criticized for cutting EU governments and commissioners out of her decision-making, the rebellion — and loss — will not be taken lightly.
It may be a sign of things to come, however, according to Alberto Alemanno, professor of EU law at HEC Paris and founder of The Good Lobby: « The announced EU deregulation agenda may soon face greater resistance, not only from disgruntled investors seeking legal certainty, but also from within the EU institutions and the very same College of Commissioners.”
One diplomat put it less diplomatically: “This is such a mess.”
Simplification argument
The Commission’s FiDA proposal, first published in June 2023,aims to force financial institutions to open their data vaults to customers and third parties, which can use that information to offer personalized services and products.
The EU’s financial services officials see the rules as a key tool in their bid to boost private investment and innovation in the single market, one of the executive’s priorities. But lobby groups are less keen, citing high costs and unclear market demand, and gained backing from within the French government to reassess or cull the text.
They came very close to winning that battle, profiting from the fact that von der Leyen and her Economy Commissioner Valdis Dombrovskis are under pressure to demonstrate the Commission’s willingness to cut red tape.
The EU’s regulation kill list, seen by POLITICO on Monday before it was officially published, included withdrawing the FiDA regulation within six months. The EU executive said the policy was “not aligned with [the] Commission’s current objectives” and would introduce a “significant burden and complexity for financial actors” which goes against the EU executive’s goal to simplify rules.
A senior EU official told POLITICO that the banking industry had lobbied von der Leyen and Dombrovskis directly. Another EU official said a big push to get rid of the rules had come from the French, whose insurance sector is vehemently against the proposals, with Germany sealing the deal’s demise when Berlin dropped support for the rules.
A German government official declined to comment. A spokesperson for the French government did not respond immediately to a request for comment.
Dombrovskis “fell for the simplification argument,” the official said. « Von der Leyen and [Dombrovskis] are just about the numbers/percentages to be cut.”
On the following day, however, FiDA was moved to a safer list of proposals on which a deal between lawmakers and governments is still pending.
Last-minute meeting
FiDA was resurrected after a meeting among commissioners to discuss the EU executive’s future work program and policy plans on Tuesday night.
The change came after “internal wrangling,” one EU official said.
FISMA officials including Albuquerque herself said “very recently that the regulation on financial data access is a priority,” two officials and one diplomat told POLITICO.
Speaking with reporters Wednesday, Albuquerque reaffirmed her backing for the financial data overhaul, describing it as part of the EU’s core mission to promote innovation in financial markets and support consumers.
Meanwhile, in a separate press conference on Wednesday, Dombrovskis called for the reduction of red tape to be a collective effort among Commission departments: “I look forward to working with co-legislators later so that they treat our simplification proposals with priority,” he said.
EU lawmakers and governments will now start negotiations on the Commission’s open finance proposal so it can become law.
Thanks to the first real test of the EU executive’s deregulation drive, FiDA lives to see another day.
Max Griera contributed to this report.
