Brussels, 30/01/2014 (Agence Europe) - No real progress has been made in a month of inter-institutional negotiations over the single bank resolution legislation.
A European diplomat said on Thursday 30 January that, of the three trialogue meetings to date, the one yesterday (29 January) was toughest. Several sources say that the European Parliament (EP) is still rejecting the idea of an intergovernmental agreement being drawn up to decide on the legal basis for a single resolution fund (SRF) but, led by Germany, the member states have decided to sign an intergovernmental agreement, which deprives the EP of some of its co-legislative powers. MEPs demand that the Council of Ministers justify in writing the constitutional obstacles to creating the single resolution mechanism (SRM) using the Community method.
The Greek Presidency will sound out the EP on areas where it might be flexible Ahead of the Ecofin Council on 18 February, a stage that is set to be crucial. For example, on the question of the duration of the transition phase over which the SRF will be built up before it is fully pooled (see EUROPE 11006).
Negotiations are continuing apace at the Council of Ministers over the intergovernmental agreement. MEPs are attending the intergovernmental conference as observers. The idea has been mooted of the national compartments (which the SRF will be divided into during the transition phase) being able to lend each other money if necessary. Issues still to be decided are whether this lending would be compulsory or voluntary, whether the member states would have formal rights of scrutiny and how money is to be mobilised if the SRF is used.
Another issue will only be settled at political level, namely the bridging finance to give the SRF enough funding during the first few years. Several delegations agree with the European Central Bank's idea of measures being incorporated in the EU treaty to allow the SRF to borrow on the money markets on the basis of state guarantees, rather like the way in which the European financial stability fund operates. Countries in northern Europe are hesitant about this. Council of Ministers experts will produce a document on the outstanding issues ahead of the next intergovernmental conference (Friday 7 February). (MB/transl.fl)