Brussels, 10/11/2015 (Agence Europe) - On Tuesday 10 November, the European finance ministers made progress towards defining the details for the bridge financing of the Single Resolution Fund (SRF), the financial arm of banking union in the eurozone.
We have reached a “consensus” on two outstanding issues in the definition of the national credit lines which will guarantee that the SRF fund has sufficient capacity from January 2016, the Luxembourg finance minister announced, confident in the ability of the Ecofin Council definitively to approve the future rules at its December meeting (see EUROPE 11426).
According to Gramegna, the eurozone countries will be able to bring in “national procedures” to approve the call for funds made by the single resolution board responsible for managing the SRF fund whenever a national credit line is called upon. These national credit lines will serve to guarantee that a state is able to top up its national compartment to the level of its obligations throughout the build-up of the SRF fund, between 2016 and 2023. “They will not be pooled”, the Minister stressed, but added that several credit lines could relate to the resolution of a single banking group due to its geographical location.
If a national credit line is mobilised, the state will be able to stagger its payments as long as the first payment is meaningful. We need to be able to react “quickly and credibly”, said Gramegna, who said that the first payment could be 50% of the total.
Completing banking union. On the reinforcement of Economic and Monetary Union, the ministers took stock of the implementation of banking union, and in particular the transposition of the 'banking resolution' (BRRD) and 'deposit guarantee' directives, a point which Germany, which has misgivings about any subsequent pooling of financial risks, once again stressed. “The sooner these measures are applied, the easier it will be to discuss additional measures”, Schäuble stressed.
This Wednesday, the European Commission will hold a guideline debate on the completion of banking union and, in particular, the realisation of the 'deposit guarantee' plank in the framework of banking union in the eurozone (see EUROPE 11424). According to the Vice-President of the European institution, Valdis Dombrovskis, this legislative initiative could be accompanied by measures to reduce the risks on the financial markets, as Berlin is calling for. (Original version in French by Mathieu Bion with Pascal Hansens)