On Tuesday 19 June, the committee on economic and monetary affairs of the European Parliament will adopt its negotiating position on the legislative package aiming to reduce financial risks in the European banking sector.
The EPP, S&D and ALDE groups are expected to get right behind the compromise proposals on the table. Time is of the essence: if Parliament does not have a definitive position before the summer, there is a risk that the inter-institutional negotiations will kick off too late, in the second half of the year, for it to be possible to reach a Parliament/Council agreement before the end of the current legislative period.
Some hope that with this vote, negotiations at the Parliament on the 'sharing of financial risks' plank, particularly the proposal to introduce a European deposit insurance system (EDIS), will be taken off ice, even though some observers consider that it will be the signal sent out by the Eurozone summit at the end of June that will make it possible to revive this text and allow Banking Union in the Eurozone to be finalised.
On Tuesday, the three groups are expected to support a compromise that has been described as “less complex” than the position reached by the Council in May, amongst other things because it gives the national authorities “flexibility” in banking resolution matters (see EUROPE 12027).
On the question of the subordinated instruments that can be mobilised in the event of resolution, there is a ceiling, a negotiator said.
One MEP spoke of a German “offensive” to set strict requirements in this field, in return for Germany agreeing for the European Stability Mechanism (ESM) to become the backstop for the Single Resolution Fund, the financial arm of Banking Union in the Eurozone.
The Greens/EFA and ECR groups submitted an alternative compromise proposal, which aims to ensure that the “subordination of claims is not too limited”. Gunnar Hökmark (EPP, Sweden), Parliament's rapporteur, is “more generous with largest banks”, whilst our position is “basically on the same line as the Council”, said Sven Giegold (Greens/EFA, Germany).
On the question of the moratorium on the continuation of the activities of a defaulting bank, the EPP/S&D/ALDE compromise refers to a period of two days after the default has been noted. A ten-day period with no moratorium will follow, after which the resolution authority may impose a further two-day moratorium.
It is worth noting that the MEPs will define a set of criteria on exemptions from the future European rules for the development banks of the member states, with the Council having added 17 development banks (including 14 German regional banks) to the list of exempted banks. (Original version in French by Mathieu Bion)