Brussels, 05/03/2014 (Agence Europe) - At the COREPER meeting on Wednesday 5 March, at which the Green Presidency sounded member states out about a preparatory paper received from the European Parliament on Tuesday evening, no major advances were made on the single resolution mechanism (SRM) for banks and the related resolution fund (SRF). On Wednesday evening, the Presidency was preparing proposals that it will be handing to the ministers at their meeting on 11 March in order to see whether it would be possible to obtain a new negotiating mandate “to move forward” as a Greek Presidency source put it, noting that time was running out if agreement is to be reached under the current European Parliament. The member states have shown flexibility over the decision-making process, explained the source. Another source said that no major progress was made in the lengthy round-the-table discussions, where Germany pointed out that despite the productive environment encouraged by the Presidency, a lot of unanswered questions remained to be settled.
In the document prepared by the Parliament, which EUROPE has seen, MEPs explain their position ahead of the vote in plenary in April. The Parliament wants the supervisory body, the ECB, to have the power to decide when a bank is classified as failing or likely to fail. MEPs want the European Commission to have the final word in the decision-making process. The SRM's plenary should establish a rulebook to use when submitting any objections to draft decisions made by the resolution board's executive. The idea is to ensure that the board can decide over the course of a weekend where necessary to wind up a bank.
The Parliament says the SRF should have a stable source of funding right from the start, possibly through a credit line and a public guarantee to reduce the cost of borrowing and ensure an effective lending capacity. If a credit line of this type is introduced right at the start, the Parliament may agree to the national compartment approach if pooling of them takes place over three years (50% in the first year and 25% in each of the two following years). The Parliament lays down its own ideas on the temporary transfer of money from one compartment to another, which it says should be determined by the resolution board.
Intergovernmental agreement. The Parliament says the Council of Ministers “must show that the intergovernmental agreement does not encroach upon the competences of the Union”, and the Parliament “is in favour of a strong bail-in, but this should be regulated in the Regulation”. The Parliament is still waiting for a legal opinion. (EL)