Feb. 6 (Bloomberg) -- The European Parliament called on European Union finance ministers to hold an emergency meeting in a bid to salvage deadlocked talks on a bank-failure law.
Martin Schulz, the assembly’s president, said today that he would write to ministers urging them to meet ahead of their next scheduled gathering in Brussels on Feb. 18 to avoid a two-week delay in the negotiations.
Guy Verhofstadt, head of the assembly’s Liberals and Democrats, said finance ministers must “make a new proposal to us” on the planned Single Resolution Mechanism for euro-area banks. He likened the decision-making process in the ministers’ current proposal to a Trabant, a car produced in the former East Germany, when “a McLaren or a Ferrari” is needed to handle bank crises quickly.
The SRM is a key part of a flagship EU project to pool responsibility for banks and prevent future financial crises. Parliament negotiators are at loggerheads with governments over the measures, warning that the blueprint agreed on by ministers would take too long to come to fruition and is too complicated to ensure quick decisions.
A deal on the SRM bill is “urgent and necessary” before EU lawmakers adjourn for May elections, Michel Barnier, the EU’s financial-services chief, said during a parliamentary debate in Strasbourg, France.
Talks stalled at a meeting yesterday between legislators and Greece, which holds the rotating presidency of the EU, amid complaints from the parliament that Greek officials had been given no mandate to negotiate.
The parliament voted today to affirm its position on the SRM, which follows the key tenets of a blueprint published by Barnier last year.
The assembly’s text outlines a decision-making system based around a central board and the European Commission, and stipulates that the system should be backed from the start by a single bank-financed fund.
The ministers’ position, agreed on in December, hands more power to the Council of the European Union, the EU institution that represents governments, and places some rules on the mechanics of the fund into an intergovernmental treaty outside of EU law. Their text also foresees that the fund would be pooled gradually from national compartments over 10 years.
“It is irresponsible of Schulz to heat up the opposition in the European Parliament,” Herbert Reul, lead negotiator for Germany’s center-right Christian Democratic Union party in last year’s coalition talks, said in an interview prior to today’s debate.
Schulz, a member of Germany’s center-left Social Democrat party, “is motivated by the election campaign for the European Parliament,” said Reul, who is also a member of the assembly. “If the banking union deal fails, Schulz will be responsible.”
“He shows no signs of working constructively on a deal. This makes it difficult to reach an agreement,” Reul said. “With such a strong opposition in parliament, concessions need to be made to reach a deal.”
Germany’s Social Democrats are in coalition in Germany’s federal government with Merkel’s CDU.
It’s “quite clear that to try to just have one side negotiating by itself,” as in the pattern of talks so far, “is not satisfactory,” Sharon Bowles, chairwoman of the assembly’s economic and monetary affairs committee, said.
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