Six political groups - EPP, S&D, Renew Europe, Greens/EFA, ECR and The Left - in the European Parliament continue to believe that completing the Banking Union in the euro area is important for the soundness of the banking sector.
In a rare joint statement published on Wednesday 7 December, they regret that the European legislator is about to miss the opportunity to set up a European Deposit Insurance Scheme (EDIS), the third part of the Banking Union, while the prudential banking framework has allowed European banks to face the economic difficulties arising from the Covid-19 pandemic and Russia’s armed military aggression in Ukraine without any problems.
Without hiding the “sensitive” nature of this issue, the political groups are convinced that the introduction of EDIS would contribute to increasing “confidence” between financial actors by strengthening financial stability and further untying the links between the banking sector and governments.
MEPs call on the European Commission to come forward with an “ambitious” review of the European Crisis Management and Deposit Insurance (CMDI) framework. “A more harmonised framework may help to overcome hurdles to the establishment of EDIS. However, it must remain clear that the review of the CMDI framework should by no means be considered a replacement for a European Deposit Insurance Scheme”, they warn.
For them, “the fact that the economic situation is more uncertain should not lead to inaction”.
According to the political groups, the establishment of EDIS should include the following building blocks: - “a targeted assessment of bank asset quality” in the EU, with a particular focus on Less Significant Institutions; - a step by step approach, starting with the pooling of liquidity and a “gradual build-up of a European Fund that enables loss-sharing” based on concrete criteria; - move forward in parallel with measures to reduce and share financial risks; - calibrate banks’ contributions to the European scheme according to the risks they face; - take into account the ongoing discussions on the reform of the European fiscal rules.
In June, the Eurogroup failed to draw up a roadmap for completing the Banking Union in the euro area by 2030 (see EUROPE 12974/10). It had detailed its vision of a CMDI framework and asked the Commission to present a legislative proposal to be finalised before the spring 2024 European elections. (Original version in French by Mathieu Bion)