Brussels, 24/04/2013 (Agence Europe) - In a special interview with this newsletter on Wednesday 24 April, Lithuanian finance minister Rimantas Sadzius said: “It is absolutely clear for me that, after Cyprus, banking union instantly became an urgent priority. Now everybody understands this. There are different positions on the how. What institutions should be involved? Should there be other institutions along with ECB and EBA or can we restrict the regime to the existing institutions?” Lithuania, which will be taking over the presidency of the Council of the EU from Ireland on 1 July 2013, wants banking union under the existing EU treaty (as opposed to Germany's desire to change the treaty). On whether a treaty change would be needed, he said: “There is no unified view. My opinion is that we anyway should do whatever is possible under the present arrangements of the treaties”.
Sadzius commented on the eurozone supervision mechanism: “It is too early to say if we join the single supervisory mechanism. If we join the eurozone, of course, we'll join also all mechanisms imposed on eurozone”. The plan is for Lithuania to join the euro in 2015.
“Bail-ins”. Sadzius pointed out the small size of the Lithuanian financial industry meant that it could be “an honest broker for banking union”. The Lithuanian Presidency will focus on the bank resolution system (the second arm of banking union). A major issue to be dealt with is how “bail-in” raids on the cash of shareholders, bond-holders and savers will work for a failed bank. He said: “Discussions will be hot. What has become clear after Cyprus is that €100,000 per person per bank is a red line that should not be stepped across”, but refused to comment any further because it is not yet clear where talks will go and the European summit in June may provide clarifications.
Clamping down on tax evasion. Following the Ecofin meeting in Dublin and the recent G20 summit (see EUROPE 10832), Sadzius said: “There is huge momentum for clamping down on tax evasion” at EU and global level.
His compatriot Algirdas Semeta, EU Tax Commissioner, and chair of the Ecofin Council Michael Noonan sent a letter on Wednesday to EU finance ministers listing seven areas where progress can be made at the 14 May Ecofin Council, such as agreement on the changes to the savings tax directive and giving the Commission a negotiating mandate for equivalent measures with European tax havens like Switzerland and Monaco. They said that Lithuania's objective is an agreement on the automatic exchange of information on a wider range of income types, including capital gains, and for an immediate start to work on a European FATCA. (MB/transl.fl)