After years of discussion and debate, the European Commission put forward proposals to promote 'simple, transparent and standardised' (STS) securitisation in September 2015. The main objectives were:
On 10 March, the ECB responded to worryingly low European growth and the growing prospect of several months of negative European inflation by cutting its main refinancing rate to zero and expanding its quantitative easing program. These are new dramatic, unprecedented steps in the battle to urgently revive growth in Europe.
In sharp contrast, the European Parliament is not in a hurry to progress the STS legislation. Paul Tang, the Dutch member of the European Parliament’s socialist group, who is heading the review of the STS proposals, has set out a timetable that will see the Parliament voting on the STS proposal at least nine months from now, in December 2016. In view of the current state of the European economy and the paucity of funding available to SMEs, many will regard this long delay as irresponsible and unacceptable.
The institutions of the European Union need to act together effectively, decisively and with agility in times of crisis. If not, the likelihood that Europe will break apart will surely increase further.