Ireland is taking over the presidency of the Council of the European Union (EU) with a highly political financial objective: to reach an agreement, if possible as early as October, on reforms to the Capital Markets Union (CMU), now renamed the Savings and Investment Union (SIU). The timetable is ambitious. The issue is one of the most sensitive of the six-month term. Behind the widely shared objective of better mobilising European savings to finance businesses, innovation, defence and the energy transition lies a much more concrete battle: should more supervisory powers be transferred to the European Securities and Markets Authority (Esma), based in Paris?
This is precisely where the Irish Presidency becomes of interest to Luxembourg. Dublin is not starting from a neutral position on the substance of the matter. Ireland, like Luxembourg, is a major centre for funds and asset management. The two countries therefore share the same strategic interest: to support deeper and more integrated European capital markets, whilst refusing to allow a key part of their model to be absorbed by centralised supervision in Paris.
In an interview with the Irish Times, the Irish Minister for Finance, Simon Harris, sums up this approach with a phrase that speaks volumes: Europe must function as a “multi-centre model of excellence”. In other words, the CMU must not be built around a single regulatory or financial centre of gravity, but around several specialised hubs, each capable of playing its part in a more integrated European market.
This is a statement that Luxembourg can wholeheartedly endorse. For the financial centre, the debate is not about the usefulness of the CMU. The country already thrives on cross-border finance, pan-European funds and its ability to connect investors, fund managers and markets. The problem lies elsewhere: Luxembourg disputes the notion that European fragmentation stems primarily from national supervision and that strengthening Esma would therefore be sufficient to free up capital.
An important distinction
Luxembourg’s position is well known. 
Ireland is taking a very similar line. It does not want to be seen as a country that is blocking European financial integration. On the contrary, its presidency programme makes the SIU a priority for Ecofin and explicitly aims to conclude negotiations on the “Market Integration and Supervision” package. However, Dublin wants an agreement that preserves the balance between European integration and national expertise.
This nuance is crucial. Ireland is not saying no to any changes to Esma. It is seeking a compromise. But this compromise must remain compatible with the multicentre model championed by Simon Harris. This likely means greater European powers over certain genuinely systemic or cross-border players, but not blanket supervision of funds and asset management from Paris.
And the pressure is mounting
On the other hand, the pressure is mounting. France, Germany, Italy, Spain, the Netherlands and Poland are pushing for Esma to play a greater role. These major economies argue that a single capital market cannot function fully with 27 different supervisory practices. They therefore wish to move towards a more European approach to the supervision of market infrastructures, certain crypto-asset service providers and players deemed to be of systemic importance.
For Luxembourg and Dublin, this approach carries a risk: that of turning the CMU into a project of institutional centralisation rather than one of market integration. Yet both countries advocate the opposite view. Europe can be more effective without becoming less decentralised. It can achieve greater harmonisation, reduce barriers, strengthen convergence between supervisors and improve access to capital, without automatically shifting power to a single authority.
That is the crux of the Irish presidency. Dublin wants to reach an agreement, but not just any agreement. If Simon Harris is aiming for October, it is not to rubberstamp a victory for centralisation. It is to find common ground between the major capitals, which want a stronger Esma, and the financial centres, which want to preserve specialised national supervision.
And a compromise line
The compromise could, therefore, hinge on the scope. Esma could be granted enhanced powers over market infrastructures of European significance, or over the largest market participants, whose activities clearly extend beyond national borders. By contrast, investment funds and asset management would remain largely supervised by national authorities, within a more convergent European framework.
For Luxembourg, this would be the decisive factor. The CSSF is not merely a local regulator: it is one of the pillars of Luxembourg’s fund ecosystem. The same logic applies to the Central Bank of Ireland in Dublin. Stripping national authorities of too much of this remit would amount to altering the very architecture of two of Europe’s leading fund centres.
Ireland is therefore holding the Council presidency from a unique position. Institutionally, it must drive forward a European compromise. Politically, it shares the interests of Luxembourg and other specialised financial centres. It is this dual position that could make this six-month term decisive: Dublin is closely enough involved to understand the red lines of the smaller financial centres, yet politically exposed enough to want to deliver a result.
The agreement currently taking shape is therefore unlikely to enshrine an all-powerful Esma. Instead, it could establish a more pragmatic CMU: greater integration, greater convergence, and perhaps more European supervision of certain targeted players, but not the end of the European multicentre model.
This is where Simon Harris’s argument really comes into its own. The debate is not between supporters of Europe and defenders of national financial centres. It pits two visions of financial integration against one another: a Europe of capital that is more centralised around Esma, and a Europe of capital organised around several centres of excellence. On this point, Dublin and Luxembourg are clearly on the same page.
