The European Supervisory Authorities (ESA) have hit out at planned budget and staff freezes from the legislative bodies, suggesting financial curbs would hamper policy implementation.

In a joint letter to the president of ECOFIN, the collective of EU finance ministers, and the secretary general of the Council of the EU, the ESA chairs decried budget cuts and called for a more long-term solution to financing.

The ESAs consist of the European Insurance and Occupational Pensions Authority (EIOPA), the European Banking Authority (EBA) and the European Securities and Market Authority (ESMA).

Gabriel Bernardino, Andrea Enria and Steven Maijoor chair the authorities, respectively.

The letter is in response to plans from the European Commission (EC), supported by the Council, to impose budget cuts and freeze staff member numbers across the ESAs.

The chairs said this would reduce the “capacity to continue to deliver on the objectives set out in the ESAs’ regulations and tasks” set down by legislators.

The letter adds: “These cuts do not reflect the fact that, in 2015, the ESAs will still be in a ‘growing phase’, which – as acknowledged by the Commission in its overall approach to European Agencies – should be reflected by additional resources.”

The ESAs were set up in 2011 in response to the financial crisis and have seen remits and legislative agendas grow over the years.

EIOPA is currently finalising the standards and guidelines for Solvency II requirements on insurers, while also contributing to IORP II, designing pension fund investment stress tests and consulting on solvency requirements for pension funds.

The letter did welcome the Council’s view that ESA resources should be adequate in relation to growing responsibilities, but said there was an urgent need to identify a “more robust and long-term solution to the financing of ESAs”.

It added: “The review should be used to discuss possible solutions, be it funding through an independent budget line in the general budget of the EU, financing by industry or a combination.”

The incoming Commission president, Jean-Claude Junker, has given the financial services commissioner, Jonathan Hill, a mandate to overhaul the financing of the ESAs – with expectations that EIOPA’s funding will fall on the pensions and insurance industry.

EIOPA is currently funded through a combination of EU taxpayer money and contributions from national regulators.

The proposal for taxpayer-independent funding is favoured by Bernardino, and backed by European parliamentarians on the economic and monetary affairs (ECON) committee.

Proposals aside from funding also included only allowing ESAs to operate one stakeholder group, flying in the face of EIOPA’s separate insurance and pensions groups.

EIOPA chair Bernardino recently told IPE he fully rejected this idea and personally saw the merit in keeping the stakeholder entities separate.