Brussels, 11/07/2013 (Agence Europe) - The European Parliament is determined to ensure that the European Commission's proposal to establish a common bank resolution mechanism is not watered down (see EUROPE 10885) and criticises Germany's legal nit-picking that the Commission is exceeding the powers granted to it by the EU treaties.
“I am happy with this courageous proposal from European Commissioner Michel Barnier”, said Jean-Paul Gauzès (EPP, France), adding: “A single mechanism for the resolution of banking crises is indispensable to achieve banking union and make sure that taxpayers do not have to pay for the bailout of banks facing difficulties. I am fully aware of the difficulties related to the financing and governance of this mechanism”. The leader of the S&D Group, Austria's Hannes Swoboda, said that “a central authority and a European resolution fund for rescuing failing banks” and “the achievement of a genuine banking union” were preconditions for ending the crisis. “A resolution framework with a single resolution fund for the banks will provide stability, strengthen confidence in the sector and protect taxpayers and depositors”, he said, arguing that “a true banking union should also include a reform of the structure of the European banking system through a separation between retail banking and the most speculative activities”. On behalf of the ALDE Group, Belgium's Guy Verhofstadt said the “European Parliament must fully support Commission proposal on single banking resolution. The Commission has done its job. It is now up to the Council to show that it also means business and is prepared to see through on its rhetoric of creating a stable banking sector in Europe that is the fundamental requirement to economic recovery. The crisis has taught us the need for a centralised system that applies the rules consistently and uniformly, free from undue political pressure”. Verhofstadt criticised “Wolfgang Schauble's legal insistence on treaty changes - We no longer have the luxury of waiting for a major treaty revision”. Similar comments were made by the Greens. “Germany has not found any allies to support its legal position. The German government is putting the common efforts to establish a European banking union at risk by using spurious legal arguments. This is irresponsible because effective banking resolution is a vital part of the banking union which is a vitally important tool to face the European crisis”, said Germany's Sven Giegold. The European Greens have financed research at Heidelberg University countering the legalist arguments made by Berlin.
On Wednesday, Steffen Seibert, a German government spokesman, said that, as far as the government was concerned, the proposal gives the Commission powers that it doesn't have under the treaties. At the European summit last month German Chancellor Angela Merkel said that the current EU treaty did not give the Commission the power to be a bank resolution authority (see EUROPE 10877).
The European Banking Federation (EBF) says: “The Single Resolution Mechanism would further alleviate contentious home-host issues in the recovery and resolution process within the participating Member States. It would also speed up cross-border resolutions which should minimise the systemic impact and the cost of bank failures (as well as the need for taxpayer support). Europe's banks see the need for the SRM to be supported by resolution-financing arrangements. However, not all EBF Members believe that a Single Resolution Fund is feasible, at least not in the short term”. (MB/transl.fl)