Dutch Finance Minister Jeroen Dijsselbloem joined negotiations with the European Parliament in a last-ditch bid to broker a deal on a euro-area bank-failure bill.
Dijsselbloem and his Greek counterpart, Yannis Stournaras, began talks with top parliament lawmakers at 3 p.m. in Brussels today, with all key points still open on creating a Single Resolution Mechanism to handle failing euro-area banks. The meeting is the last scheduled before a March 26 deadline set by Greece, which holds the EU’s rotating presidency.
“Finding an agreement on the SRM is our absolute priority,” Michel Barnier, the bloc’s financial-services chief, told legislators yesterday. “We have enough elements in play to reach a deal tomorrow.” Barnier will also take part in the meeting.
The SRM is part of an EU effort to prevent future financial crises by pooling responsibility for euro-area banks, a project known as banking union. A blueprint put forward last year by Barnier would create a central resolution board backed by a 55 billion-euro ($77 billion) fund financed by industry levies. If the law’s not passed before European elections in May, a delay of a year or more could ensue, according to EU President Herman Van Rompuy.
A deal on all aspects of the SRM isn’t possible today, Sven Giegold, a German lawmaker representing the parliament’s Green group in the talks, told journalists before the meeting.
“We will be able today to have a fixed list of issues with a clear parliamentary offer,” he said. “There has to be substantially more movement,” from governments.
Greece has said that March 26 is the last day a deal could be reached and still be processed in time for the texts to be voted on in April at the assembly’s last plenary session before the election.
ECB Executive Board member Yves Mersch said last week that not having the SRM “would be very close to suicide.” The ECB assumes full oversight of euro-area banks in November. “I don’t underestimate the difficulty of the subject, also in view of some constitutional constraints that might exist in some countries.”
Barnier said yesterday that “banking union cannot function correctly in the absence of a Single Resolution Mechanism alongside European-level supervision.”
The parliament and the bloc’s finance ministers proposed competing visions of SRM in December. They’re now haggling over a compromise text of the bill, which both must approve.
Dijsselbloem and Stournaras will lead the negotiating team representing EU member states. The parliament’s team is led by Portuguese lawmaker Elisa Ferreira.
The EU assembly has challenged an array of changes made by governments to Barnier’s blueprint for for SRM, including steps to give national governments and national regulators more power in the system, a move that lawmakers claim will make the SRM too convoluted to be effective.
One issue on which a compromise might be found today is the role that the Council of the European Union, the EU institution that represents national governments, should play in the system, Giegold said.
Lawmakers are also calling for the planned fund to be effective from day one of the SRM, and are opposed to a plan put forward by governments to pool the money steadily from national compartments over ten years.
While various options could be envisaged for continuing talks beyond today and getting a pre-election deal, the consequences of parliament not voting before the elections shouldn’t be exaggerated, Giegold said.
“If there is no deal on the SRM in this mandate it doesn’t change much,” Giegold said. “There is no need for the stability of the European banking system to have an agreement in this or next week.”
Should a deal be reached with too little time remaining for a parliamentary vote, the new assembly could instead take that step, he said.
“It is not the end of the world if the SRM will only be voted on a bit later,” he said.