Brussels, 08/11/2013 (Agence Europe) - There was no change in member states' positions on key aspects of the future bank resolution scheme at the meeting of member states' representatives to the EU (Coreper) which discussed this matter on Thursday 7 November. It will now be for EU finance ministers to give the Lithuanian Presidency guidelines on continuing the negotiations with the aim of reaching agreement in principle at the Council of Ministers by the end of the year.
An expert who attended the meeting said that it was the same old discussion and nobody had changed their views (see EUROPE 10959). He said the talks had reached a point where only the ministers can get things moving. Coreper discussed the possibility of putting the question on the Ecofin Council's agenda for 22 November, a meeting that will be looking at draft national budgets for 2014.
Basically, Germany (backed by Finland, Bulgaria and the Czech Republic) is expressing doubt about the legal basis (Article 114, internal market) of the draft legislation.
Germany, Romania and Finland are calling for decisions triggering a bank resolution to be made by the Council of Ministers rather than the European Commission. Most other countries disagree and want to stick with the initial proposal. The expert says, however, that the role of the Council might be strengthened for decisions that would impact on a country's budget. A memorandum from the Lithuanian Presidency drawn up before the Coreper meeting says that some delegations still feel that the Council should play a role when key decisions are taken. The Council boosted provisions (Article 6.4) whereby member states will have to give the go-ahead each time public money is mobilised.
On the scope of application, Germany and Slovakia want to restrict the single resolution mechanism to the 130 eurozone banks that will be directly supervised by the ECB when it becomes the European bank supervisor in November 2014. Most delegations, however, disagree, wanting all banks covered by the single supervision mechanism to be covered by the resolution scheme. This is the also the view of the European Central Bank, which issued an opinion on the matter on Friday.
The Commission has suggested a single resolution fund financed by banks in advance of any crisis, with a budget of €55-60 billion by 2025. Here too, Germany heads a group of countries opposing the creation of such a fund, preferring a network of national resolution funds instead.
Any bank resolution procedures will include harmonised rules on bail-ins to force a bank's shareholders and lenders to be the first to bear the burden of losses before raiding the savings of uninsured private savers and then, if necessary, public money at national and European level. The bail-in rules are still being negotiated by the Council and the EP and are due to be passed at the same time as an agreement at the Council on the single bank resolution mechanism. Three countries, Germany, Finland and the Netherlands, say that a good way of limiting the use of public money would be to have the bail-in rules and the single resolution mechanism come into force at the same time, either early in 2015 or early in 2018. The ECB says that the bail-in rules should come into force before 2018. (MB/transl.fl)