France, Spain Tell Germany to Honor June Pledge on Banking Union

French President Francois Hollande and Spanish Prime Minister Mariano Rajoy called on nations such as Germany to honor commitments on a banking union made at the European Council in June.

“We want something as basic as those decisions being fulfilled,” Rajoy said at a press conference in Paris with his counterpart.

German Finance Minister Wolfgang Schaeuble has been hedging his commitment to bringing European lenders together under a single supervisor, saying yesterday it may not be possible to meet a Jan. 1 deadline. European leaders called for the measure in June as a condition for allowing banks in the 17-nation euro area direct access to the 500 billion-euro ($645 billion) permanent bailout fund, the European Stability Mechanism.

Both Hollande and Rajoy, who held a summit today in the French capital, insisted the framework should cover all lenders in the currency union. Schaeuble has called for the biggest banks to enter first.

“The regulator must be credible, and to be credible it must have a wide field to cover,” Hollande said.

The comments echo a statement issued alongside Italian Prime Minister Mario Monti as well as the leaders of Portugal and Cyprus last week, calling for the European Union to meet its self-imposed deadline. Schaeuble said last month it may take time to build the supervisory apparatus required, and raised the prospect of subjecting lenders to stress tests before allowing them to shelter under the pan-European umbrella.

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