Brussels, 20/01/2014 (Agence Europe) - Germany's finance minister, Wolfgang Schäuble, found it very difficult on Monday 20 January to convince the MEPs negotiating the bank resolution mechanism (SRM) with the member states of the sense of drawing up an intergovernmental agreement to provide a legal basis is to aspects of the future single resolution fund (SRF).
Corien Wortmann-Kool (EPP, Netherlands) told this newsletter that it was clear to her that Germany's legal argument did not hold much water because creating rigid national compartments before they are fully pooled after the first ten years, when the SRF has been built up, as member states are demanding under pressure for Germany, would lead to a fund that was single (common) in name alone when the first five years of the fund would be crucial for establishing the credibility of the bank resolution mechanism.
She also criticised the Council of Ministers' suggested decision-making process for the winding up of a failing bank, which would leave too much space for political bargaining and horse-trading. The EP says that letting the member states, rather than the Commission, make the final decision on a bank resolution would not ensure that all banks in the eurozone were treated fairly and yet fair treatment is crucial for the single market.
Demanding its rights as co-legislator on the SRM and harmonisation of bank resolution rules in the EU (agreement in principle has been reached on the BRRD directive, but it has not yet been formally adopted by the EP), the European Parliament is demanding substantial changes to the ministers' position in inter-institutional talks due to be concluded by April (see EUROPE 10998).
The president of the European Commission, José Manuel Durão Barroso, called on Monday for the EP and Council of Ministers to re-assess their views in order to reach agreement during the current European Parliament. Barroso said each side had to change, but made no comment about the intergovernmental agreement that is being formulated.
On Friday, at the second meeting of the intergovernmental conference to draw up the SRF, the EP is reported to have kept silent about its dislike of the intergovernmental treaty, only mentioning a problem with the timing - completing the SRF treaty in time for the March 2014 ECOFIN Council does not leave enough time to finalise the inter-institutional talks on the full SRM. At the second trialogue meeting on the SRM,, the MEPs were far more critical and, with one eye on the European elections, did not seem prepared to tone down their demands. At the Council of Ministers, however, people do not see how the EP can force countries to do a U-turn on the decision taken by finance ministers in December. (MB/transl.fl)