Brussels, 13/05/2013 (Agence Europe) - The French and German stances still differ over the possibility of creating a European bank restructuring authority without any change of treaty, with this Tuesday's Ecofin Council to debate the proposed directive harmonising the national restructuring rules designed to be the pillar of the single bank restructuring mechanism (see EUROPE 10843).
“Wolfgang Schäuble says that we should go as fast as far as possible without changing the treaty and, if there are any problems which call for a change of treaty, then we will see when that time comes. I agree with that point. Possibly with a slight nuance: we can go very very far with the existing treaties and possibly we also need an integrated authority”, said the French minister for the economy, Pierre Moscovici, upon his arrival at the Eurogroup on Monday 13 May (our translation). Stressing the “political goodwill” which is indispensable to find the best legal basis for banking union, he said that this construct was “absolutely vital” to put an end to the fragmentation of the financial system in the eurozone and allow eurozone companies to benefit from the low interest rates currently available.
“Many of the building blocks of the banking union can be put in place and we should work forwards to maybe reach further agreement around this summer and the issue of treaty change can be addressed later on”, said the president of the Eurogroup, Jeroen Dijsselbloem.
Unlike Paris, Berlin still firmly believes that, following the creation of the single supervisor under the aegis of the ECB, the second and third planks of banking union - in other words the creation of a single restructuring authority and a single deposit guarantee regime - will ultimately require a change to the treaties, notably because these imply a pooling of responsibilities. Some countries see this strictly legal approach as a delaying tactic, a few months ahead of the general elections in Germany and with less than a year to go until the end of the term of the European Parliament, which is the co-legislator on this issue.
“While supervision keeps risk-taking in check, resolution is more intrusive. It is about apportioning the costs of risks, if they materialise, among stakeholders”, said the German finance minister in an article published in Monday's Financial Times. Schäuble argued for a two-stage approach, starting with banking union comprising a single supervisor, harmonised national bank restructuring rules, deposit guarantee and bank capital requirements (CRD IV package). This architecture could even be built onto the back of a last-resort financial power, in this case the European Stability Mechanism (ESM). “Instead of a single European resolution fund - which the industry would take many years to fill - such a model would lean on national funds”, the German minister added. However, the current treaty is not enough to serve as an unequivocal legal basis for any central bank restructuring authority. (MB/transl.fl)