The President of the Eurogroup, Paschal Donohoe, presented to the enlarged Eurogroup on Monday 14 March his approach that would allow the completion of the banking union in the euro area, notably through the establishment of a European Deposit Insurance Scheme (EDIS).
“Our discussions got into the substance of a work plan that [euro area leaders] have asked us to deliver. I put forward a phased approach with four work streams and I am happy to report that overall my colleagues confirmed that this approach is a credible basis for further discussions”, said Mr Donohoe.
The four work streams are the following: - the establishment of EDIS in two phases (first the provision of liquidity and, after compliance with certain risk reduction conditions, a progressive loss sharing); - improving the management of financial crises arising from bank failures; - further integration of the European banking market; - diversification of banks’ exposure to sovereign risk.
“Ministers do not want to negotiate legislation if they do not have a prior idea of where the reforms will end up”, an EU source said on Tuesday.
In an op-ed published the same day in the Financial Times, the Eurogroup President describes two working phases. The first - which we understand will be completed by the end of the current legislature - will contain legislative proposals from the Commission to prepare the eurozone for future crises. The second will only take place after a political decision has determined that the previously set objectives have been achieved. Mr Donohoe does not specify the final timetable or the content of the objectives.
The President of the Eurogroup will submit a draft framework to Ministers in April or May with the aim of reaching a political agreement in June, before the Euro Summit. (Original version in French by Mathieu Bion)