Brussels, 18/12/2015 (Agence Europe) - The German Chancellor, Angela Merkel, was a lone voice in criticising the proposed regulation to bring in a European deposit insurance scheme (EDIS), the third pillar of banking union in the eurozone, at the European Council of Friday 18 December.
We have been clear since day one: we cannot support this proposal, Merkel told a debate on the deepening of economic and monetary union (EMU), according to reports. She expressed her “misgivings” about the EDIS proposal, which will progressively pool, up to the end of 2023, the risks related to the savings of private individuals (see EUROPE 11448). Merkel said that the fact that the 'deposit guarantee' plank is a condition for the smooth functioning of banking union has never been expressed. Berlin is therefore bringing pressure to bear for the European work in the financial field to give the priority to reducing risks rather than any increased sharing of risks within banking union.
During the debate, the Italian Prime Minister, Matteo Renzi, asked the Chancellor if her position was definitive. “It was not an attack”, he told the press after the work. Italy is very much in favour of a pooling of the risks related to bank deposits, an initiative which it feels is in fact likely to increase the confidence of market players and therefore reduce financial risks. Along the same lines, his fellow Socialist, the French President François Hollande, said that it was “very important” but banking union is added to by a European deposit insurance system.
In their conclusions, the European leaders call upon the Ecofin Council “rapidly” to examine the proposals of the Commission to reinforce the EMU, such as the EDIS proposal and the creation of national competitiveness authorities, and to report back to them in June 2016. According to the President of the European Council, Donald Tusk, they are “ready to make tough decisions” to reinforce economic and budgetary governance in the eurozone. However, they declined to give examples of the possible measures. On Friday, the European Council did not in any case discuss more ambitious initiatives which would call for Treaty change, such as the creation of a budgetary capacity to support the eurozone countries carrying out in-depth reforms of their economies. They will return to these issues by the end of 2017, in other words after the general elections in Germany and France. “There is nothing really new to stress”, the President of the Commission, Jean-Claude Juncker, concluded. (Original version in French by Mathieu Bion, Pascal Hansens and Camille-Cerise Gessant)