Brussels, 06/12/2013 (Agence Europe) - The EU28 finance ministers will try to make as much progress in their talks on the resolution arm of banking union on Tuesday 10 December, although agreement is unlikely given the number of issues over which the member states are still divided.
The Ecofin Council will examine the draft legislation to introduce a single resolution mechanism (SRM) for banks, the expanded version of the draft including a single authority of national bank resolution bodies and a common fund financed by industry for covering some of the costs of a bank resolution (see EUROPE 10978).
The main stumbling blocks include governance of the resolution process (which European institution would endorse decisions taken by the single resolution committee), the scope of application, the extent and financing of the common resolution fund, how the resolution committee operates and takes decisions, a backstop for the resolution fund and the role of the European Banking Authority (ABE) in the resolution mechanism (see related article).
The ministers will also discuss the inter-institutional negotiations on the draft BRRD directive harmonising national bank resolution systems, ahead of the trialogue meeting in Strasbourg on Wednesday 11 December, where final political agreement is expected. The draft directive extends across the EU bail-in tools to ensure that shareholders and a bank's lenders contribute to the winding-up before any public monies are injected. The exact order of bail-in contributions has to be decided upon, and how individuals' and small businesses' bank accounts are to be protected. The ministers want preventive recapitalisation of banks that meet the minimum capital requirements but which fail the EBA stress tests and therefore need to boost their capital.
The ministers will endorse the European Commission's 2014 growth survey, a document used by the member states when drawing up their budget and economic policies as part of the European Semester process (see EUROPE 10962). The Ecofin Council will try to reach agreement on the draft directive revising Europe savings tax rules (see related article). (MB/transl.fl)