Germany is trying to drum up support among European Union finance ministers for a proposal to use an agreement among participating states to create a planned euro-area bank-resolution fund, three EU officials said.
The ministers are in Brussels today to discuss a Single Resolution Mechanism for euro-zone banks that was proposed in July by Michel Barnier, the EU’s financial-services chief. Barnier’s planned common fund, which would cover the costs of saving or shuttering banks, has divided the bloc.
Under Germany’s initiative, which has run into skepticism from some ministers, the single fund would be based on an intergovernmental agreement, the officials said on condition of anonymity because the talks are private. A similar accord was used to create the European Stability Mechanism, the euro-area firewall fund. Germany’s new initiative is an alternative to other efforts to require EU unanimity when creating the fund.
EU leaders have made an agreement on the bank-failure bill a top priority for their Dec. 19-20 meeting, with the goal of getting the law on the books before the European Parliament goes into recess for elections in May. The most contentious issues in the talks have been the common fund, the scope of the mechanism and the question of who’ll have the final say in ordering a bank closure.
German Finance Minister Wolfgang Schaeuble has led opposition to Barnier’s bill, which he says has “no stable basis” in EU law for winding down banks. Germany would consider splitting talks on the Single Resolution Mechanism, a government official said yesterday, with parallel negotiations on a decision-making mechanism and on the common fund.
In addition to today’s proposed intergovernmental agreement, the Germans have raised the possibility of using Article 352 of the Treaty on the Functioning of the European Union to create the fund, rather than Article 114 as in Barnier’s blueprint. Article 352 requires unanimous support among all EU states.
To contact the editor responsible for this story: James Hertling at firstname.lastname@example.org