The European Commission is up in arms over the agreement recently reached by the EU Council on the ‘CMDI’ legislative package aimed at strengthening the management of a banking crisis within the eurozone banking union (see EUROPE 13435/2).
“ I fear that this compromise would be detrimental to the future of the Banking Union as it will not fasten harmonisation but rather renationalise how crisis management and deposit insurance are implemented in the EU,” commented the European Commissioner for Financial Services, Mairead Mc Guinness, at the Ecofin Council meeting in Luxembourg on Friday 21 June.
In her view, the Member States’ position “will not improve the depositors' protection and financial stability” and “will not open the scope of resolution for significantly more banks as it puts considerable constraints on access to industry-funded safety nets to finance resolution”.
The Commissioner added that the EU Council’s agreement “creates even more incentives to use national tools outside the harmonised resolution framework and increases the risk of using taxpayers' money to steer ailing banks”. It also weakens “the European dimension of the governance of the Single Resolution Board by reducing its strength, independence and capacity to act in the interests of the European Union”.
However, the Commission is not threatening to withdraw the legislative initiative, hoping that the trilogue negotiations with the European Parliament will restore the situation.
On behalf of the Belgian Presidency of the EU Council, Vincent Van Peteghem felt that the Member States’ agreement reflected “the political reality” around the table. The German Secretary of State, Heiko Thomas, described the legislative package as “very balanced, reflecting the different points of view of the Member States” and representing “a step forward in strengthening the banking union”. “We have not renounced any basic principles,” he said. (Original version in French by Mathieu Bion)