Spanish MEP José Manuel García-Margallo y Marfil (EPP) has thrown down the gauntlet to the Council, saying an accord on the supervision package rests with member states. As talks between the two institutions and the European Commission remain frayed ahead of a putative plenary vote in July, the deputy - who is rapporteur on one of the regulations in the six-text package - said there is still “a long way” to go before an agreement is reached. “The Council is forgetting the last crisis and not preventing a new one,” he said, on 23 June.

The Commission published proposals last September suggesting the creation of a pan-EU risk watchdog (the European Systemic Risk Board) and three supervisory bodies with binding powers to police national banking, securities and insurance markets. The Council last December secured a safeguard or appeal clause against decisions taken by the three sectoral watchdogs, while the Parliament has fought furiously to make sure the three bodies - the so-called European Supervisory Authorities (ESAs) - have the requisite power to do their job, especially in future emergencies or where there are disagreements between national supervisors. But there are major divisions over whether to give the ESAs the ability to address decisions directly to banks. Tensions have also arisen over where the bodies should be based, voting methods and how they draw up technical standards.

The UK, France, Germany and Italy will discuss a compromise with the Spanish EU Presidency in the margins of a G20 meeting, on 26 June, and final talks are set for 28 June. If no common ground is reached by then, MEPs are likely to call off a plenary vote in July and wait until October. Meanwhile, a July vote on the Hedge Funds Directive is to be scratched as the likelihood of an accord runs out.