Brussels, 12/10/2012 (Agence Europe) - At a round table discussion in Brussels on in October organised by the “Friends of Europe” on “The State of the Union: Escaping the Doldrums,” the Italian prime minister, Mario Monti, said he thought the October EU summit should reach agreement in principle on the common bank supervision mechanism, thus paving the way for it to be formally introduced at the end of the year.
Monti said that introducing the bank supervisory system would be crucial to ensure that problems with banks did not lead to sovereign debt crises and would be a step towards a genuine European Stability Mechanism that would soon be able to recapitalise banks directly. He said the litmus test of the EU's ability to meet its own commitments would be the quality of decisions taken at the upcoming European Summit on common savings guarantee rules and solving the bank crisis, pointing out that it was in June this year, that this had been given the key impetus (Stability and Growth Pact, ECB decisions to buy up sovereign debt, bank bailouts and the Single Market Act II), which had made people aware of the systemic nature of the crisis and the need to put growth and jobs back on the agenda. The views of countries calling for structural reforms and budget cuts needed to be combined with those calling for neo-Keynsian demand-based economic stimulus policies.
The Italian prime minister warned that heads of state would have to deal with the biggest political challenge - ensuring the euro is not used to disunite the European Union and the single market through state bailouts of banks and varying costs for companies facing the same solvency criteria but located in different member states. Monti defended Italy's achievements, saying the new finance law that has just been passed will help restore budget equilibrium next year, giving the country one of the best budgetary positions in the eurozone. (FG/transl.fl)