COMMISSIONER MCCREEVY INTENDS TO ATTEND

UNCLAS SECTION 01 OF 02 BRUSSELS 001576 SENSITIVE SIPDIS PLEASE PASS TO USTR PLEASE PASS TO FED, SEC STATE FOR E, EEB A/S SULLIVAN, EUR/ERA, EB/OMA NSC FOR K. KVIEN NOT FOR INTERNET DISTRIBUTION E.O. 12958: N/A TAGS: EFIN ECON ETRD EUN SUBJECT: COMMISSIONER MCCREEVY INTENDS TO ATTEND NOVEMBER RESCHEDULED TEC ¶1. (SBU) European Commission Internal Markets Commissioner McCreevy told Ambassador October 9 he plans to attend a rescheduled TEC meeting in November. McCreevy stressed his support for the TEC and belief it should continue into the next U.S. Administration and Commission. He said upcoming European Council meetings would focus on the global financial crisis, cautioning that the EU can coordinate on responses but has limited capability to act jointly. McCreevy stressed that the EU equivalence determination for U.S. GAAP is Qon track,Q and said his final proposals for new credit rating agency supervision would come out the week of November 10. MCCREEVY PLANS TO GO TO NOVEMBER TEC MEETING -------------- ¶2. (SBU) European Commissioner for Internal Markets and Services Charlie McCreevy told Ambassador Silverberg October 9 that he would agree to go to a November TEC. He said that we would work with Verheugen to find a good date. He highlighted his strong pro-U.S. views, saying he is one of the strongest supporters of the TEC on the Commission, sees value in its work, wants to support the efforts of TEC lead Commissioner Verheugen, and agreed with the Ambassador that another meeting this year would provide critical momentum to keep the TEC going into a new U.S. Administration and new Commission. The TEC could develop into something much greater within five years, he said. EU RESPONSES TO FINANCIAL CRISIS -------------- ¶3. (SBU) The Ambassador asked about next weekQs European Council meeting. McCreevy said it will be dominated by financial crisis discussions, but cautioned that the EUQs current treaty structure and institutions limit the degree to which unified actions can be taken in response to the crisis. Member states can attempt to coordinate principles for any responses, he stressed, but said that in the end heads of state are responsible to their citizens and will act as necessary to protect their national interests. ¶4. (SBU) He pointed to the series of national actions by Germany, the UK, Ireland, Denmark and other states in strengthening deposit guarantees, partially nationalizing banks and providing liquidity injections in response to the crisis. He noted the inability of Germany, France, the UK and Italy to agree on joint actions at last weekQs French-led mini-Summit on the crisis. He did say, though, that the European Council will work to the degree possible to coordinate actions and reassure markets. ¶5. (SBU) The Ambassador noted the extraordinary coordination by six Central Banks October 7 in cutting interest rates; McCreevy responded that the central banks have strong mechanisms for cooperation and histories of working together quietly. He said that a joint U.S.-EU-Japan crisis response would be ideal, but expressed skepticism about this possibility. ACCOUNTING EQUIVALENCE DETERMINATION QON TRACK -------------- -- ¶6. (SBU) McCreevy told the Ambassador that the EU accounting equivalence determination for US GAAP is Qback on trackQ after being approved by the European Parliament Economic and Monetary Affairs Committee. He said the Commission proposal will be voted on by the EP plenary October 23, which should follow the lines of the Econ committee vote and approve the proposal. He said the proposal will then be examined by the European Securities Committee (of member state representatives) in November, which he also expected would result in approval. BRUSSELS 00001576 002 OF 002 CREDIT RATING AGENCY PROPOSAL OUT WEEK OF NOVEMBER 10 -------------- -------------- - ¶7. (SBU) Also, McCreevy told the Ambassador that his proposal for increased credit rating agency (CRA) oversight has been sent for interservice consultation (to other Commission DGQs),and should be finalized the week of November 10. He noted that Commission President Barroso misspoke yesterday in saying the proposal would be out next week. Finally, McCreevy welcomed the prospect of more frequent communication with the U.S. Treasury on U.S. policy responses to the financial crisis. SILVERBERG