EU Finance Ministers Urged to Compromise on Bank Crisis LawJim Brunsden
Germany’s Wolfgang Schaeuble and other European Union finance ministers face calls to adopt a more flexible position on a draft bank-failure law or risk a collapse in negotiations on the legislation.
Greece, which holds the rotating presidency of the EU, warned governments that they must yield ground on a range of issues in talks with the European Parliament on a Single Resolution Mechanism for euro-area banks, because their current position “blocks any progress,” according to a document published on the EU’s website.
“A new mandate is a prerequisite for any substantial progress in the negotiations,” according to the Greek note, dated Feb. 7. Greece “will continue working on possible compromises on all open issues.”
The SRM is a key part of a flagship EU project to pool responsibility for banks in a bid to prevent future financial crises. The legislation to establish it must be approved by national governments and the EU parliament to take effect.
Lawmakers in the assembly have warned that a version of the SRM blueprint agreed on by finance ministers in December would take too long to come to fruition, would be politicized and is too complicated to ensure quick decisions.
Greece is leading negotiations on behalf of other governments.
Potential compromises that governments should consider include scaling back the role that the Council of the European Union, the EU institution that represents nations, would play in the system, according to the Greek note.
Other moves could include reducing the range of decisions that have to be referred to a full rather than executive session of a planned bank resolution board, and adjusting the board’s voting rules.
National ambassadors will discuss the draft law tomorrow ahead of a meeting of finance ministers in Brussels next week.