The European Council consists of the heads of government of the 28 EU Member States. It sets the general political direction of the EU and establishes its priorities by adopting “conclusions” following quarterly summits. It is not one of the EU’s legislating bodies, and should not be confused with the Council of the European Union (see below).
The European Commission is the executive branch of the European Union. It has the sole power to initiate legislative proposals, which must be approved by both the European Parliament and the Council of the European Union (see below). While the Commission does not have the power to introduce or veto amendments to legislation, if it objects to amendments unanimity is required in the Council for the amendments to be adopted. This, along with the Commission’s agenda setting power, makes it a key player in negotiations over EU laws.
Council of the European Union
The Council of the European Union is one of the European Union’s two ‘co-legislators’, along with the European Parliament (see below). It consists of government Ministers from the EU Member States who meet to discuss, amend and adopt laws proposed by the European Commission (see above).
The European Parliament is, along with the Council of the European Union, one the EU’s co-legislators. It is composed of 751 elected MEPs organised into 8 recognised political groupings. The Parliament can approve and amend proposals made by the Commission, but must agree a final text with the Council in order for a proposal to become law.
Trialogues are informal meetings of representatives from the European Parliament, the Council of the European Union and the European Commission. They are used to agree amendments to legislation that are acceptable to all three parties.
European Supervisory Authorities
The European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) are the three European Supervisory Authorities. While national supervisory authorities remain in charge of supervising individual financial institutions, the ESAs aim to improve the functioning of the internal market by promoting harmonised European regulation and supervision by developing Level 2 regulation (secondary legislation) and guidance. They are accountable to the European Parliament and the Council of the European Union.
European Securities and Markets Authority
ESMA, based in Paris, is the ESA (see above) responsible for promoting stable and orderly financial markets. ESMA’s remit includes markets and securities regulation, asset management and investor protection.
European Insurance and Occupational Pensions Authority
EIOPA, based in Frankfurt, is the ESA (see above) responsible for the supervision of the insurance and pension sectors, and ensuing that policyholders are sufficiently protected.
European Banking Authority
The EBA, based in London, is the ESA (see above) responsible for the banking sector. Its overall objectives are to maintain the EU’s financial stability and to safeguard the integrity, efficiency and orderly functioning of the banking sector.
Regulatory Technical Standards
Level 1 (primary) legislation may empower the Commission to adopt technical standards in the form of RTS. The RTS are prepared by the relevant ESAs, and submitted to the Commission, which has 3 months to adopt the RTS or send them back to the ESAs for amendment. Once adopted by the Commission, there is a 1 month window (which may be extended to 3 months) for the European Parliament and the Council to object to the proposals.
Implementing Technical Standards
Level 1 (primary) legislation may empower the Commission to adopt technical standards in the form of ITS. The ITS are prepared by the relevant ESAs, and submitted to the Commission, which has 3 months to adopt the RTS or send them back to the ESAs for amendment. Unlike RTS (see above), ITS are not scrutinised by the Parliament or the Council.
European Central Bank
The ECB is the central bank for the Eurozone. It is responsible for monetary policy in the Eurozone, as well as identifying and monitoring systemic threats to financial stability such as excessive levels of leverage and debt.
European Investment Bank
The EIB is the EU's development bank, owned by the Member States. It uses its creditworthiness to borrow at low rates on international capital markets and works closely with other EU institutions to finance projects that contribute to EU policy objectives.
European Investment Fund
The EIF is a specialist provider of risk finance to SMEs across Europe. Between 2011 and 2015 the EIF invested €2.3bn into UK venture capital and growth funds. It is majority owned by the EIB (see above).