Brussels, 14/06/2016 (Agence Europe) - On Tuesday 14 June, the president-in-exercise of the Ecofin Council, Jeroen Dijsselbloem, reported back on the current drafting work at the Council of the EU on a roadmap towards the finalisation of banking union in the eurozone. It is hoped that an agreement on this document, which will provide for measures to share and reduce financial risks by 2024, will be reached at the meeting of the European finance ministers in Luxembourg on Friday 17 June (see EUROPE 11565 and 11571).
According to the Dutch finance minister, the deadline of 2024 seems the most appropriate to finalise banking union, a “highly complex” dossier in which many different positions are expressed. The end of 2024 corresponds to the end of the build-up phase of the Single Resolution Fund (SRF), the financial arm of the resolution plank of banking union. The choice of this date is an opportune one, Dijsselbloem told the European Parliament's committee on economic and monetary affairs. By then, there should be a backstop in place for the SRF and the European deposit insurance scheme (EDIS) should be up and running. As this approach will need to be “balanced”, the minister hopes that the roadmap will include measures to reduce financial risks in order to deal with unfavourable legacy assets in the meantime (see EUROPE 11565). “I have reason to believe that this is possible”, Dijsselbloem stressed, rejecting the argument of Philippe Lamberts (Greens/EFA, Belgium) that the work underway at the Council aims to delay matters by sending the dossier back to the European Commission for it to come up with new proposals. These concerns were also shared by Pervenche Berès (S&D, France).
Bernd Lucke (ECR, Germany) said that the EDIS proposal to complete the third pillar of banking union was likely to increase the distortion of competition between banks within the banking union and banks outside the eurozone. He argued that a European solution should see the national regimes competing with each other. Observing that consumers were struggling to understand the risks inherent to the banking sector, the Dutch minister called for strong banking supervision and deposit protection rules. “A protection system at European level would be stronger (Ed: than a series of national systems). And before we move into a system of this kind, we need to know what the risks are”, he stressed.
The Parliament's rapporteur on the EDIS proposal (see EUROPE 11537), Esther de Lange (EPP, Netherlands), confirmed that she would lodge her draft document, which will include the questions of sharing and reducing financial risks, this Wednesday 15 June.
Warning to the Commission over respecting pact. De Lange questioned Dijsselbloem over his recent criticism of the way the European Commission is applying the Stability and Growth Pact (see EUROPE 11565). “I am very concerned”: the Commission is the guardian of the pact, but “if the member states feel that the Commission's decisions are difficult to predict or draw distinctions between the small and the large member states”, then it makes it “difficult” to ask everyone to respect the rules we have approved, the minister said. He referred once again to the comments of the president of the European Commission, Jean-Claude Juncker, who said that extra time had been granted to the French authorities to bring the country's public deficit back within the bounds of the pact by 2017 “because it's France”. Sylvie Goulard (ALDE, France) backed the minister up, referring to the French Constitution, which guarantees equality of treatment.
Bernard Monot (ENF, France), accused the Netherlands of “serious fiscal crimes” in its creation of a “tax avoidance industry” which is believed to have led to hundreds of billions of euro in tax income being avoided in the EU. Dijsselbloem did not deny the fact that his country may have been the basis for some of the problems related to tax avoidance in the EU. Now, “we need to be part of the solution” by applying international standards, he added, referring to changes to the Dutch innovation box regime.
The current president of the Ecofin Council said that he hoped that the member states would agree, on Friday, on the proposed recommendation to set in place national competitiveness authorities (see EUROPE 11415). These authorities will focus their attention on improving the productivity of work rather than on increasing competitiveness by driving costs down, Dijsselbloem said, stressing the importance of complying with national traditions in terms of setting salaries and wages.
The minister went on to anticipate an agreement between the Council and the European Parliament on the revision of the institutions for occupational retirement provision (IORP II), possibly this Wednesday. (Original version in French by Mathieu Bion)