EU Ministers Seek Bank-Law Breakthrough as Deadline ApproachesJim Brunsden
Germany’s Wolfgang Schaeuble and other European Union finance ministers will seek to salvage a bank-crisis bill next week amid disagreement over how far national governments should compromise on the plans.
European Parliament lawmakers are at loggerheads with EU national governments over the blueprint of a Single Resolution Mechanism to handle failing euro-area banks. While Greece, which holds the EU’s rotating presidency, is warning that a deal will be impossible unless nations show flexibility, Germany has so far resisted most compromise suggestions.
Governments must “give a clear signal that they are prepared to move on areas of our key concern,” Corien Wortmann-Kool, a senior EU parliament lawmaker, said by telephone today. “We need a clear green light that they are ready to engage in real negotiations.”
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.
The EU assembly has said that a version of the SRM agreed on by finance ministers in December would take too long to come to fruition and is too complicated to ensure quick decisions.
Herman Van Rompuy, the EU’s president, has warned that the bloc risks losing at least a year in setting up the system if it fails to broker an accord before parliament adjourns for May elections.
Ministers will meet in Brussels on Feb. 17 in an attempt to bridge gaps on the text of an intergovernmental agreement setting out details of a bank-financed fund for the SRM.
Nations are split on issues including the conditions under which different national compartments in the fund should be allowed to lend to each other, and how to pool resources when dealing with the failure of a large cross-border bank, according to a document obtained by Bloomberg News.
They are also divided on the order in which different steps should be taken to finance an intervention at a stricken lender.
EU finance ministers will meet again on Feb. 18 for more talks on the proposed bank-failure agency and fund.
The negotiating constraints faced by Greece mean that “we have lost one and a half months already,” Wortmann-Kool said. “We can’t afford to lose more.”
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 a Greek note circulated to governments.
“A new mandate is a prerequisite for any substantial progress in the negotiations” with the parliament, according to the Greek note, dated Feb. 7.
Little headway on this was made with Germany at a meeting of senior officials in Brussels yesterday, according to two people familiar with the talks.
While nations including France and Ireland have said that they would be open to compromises including moving faster to break down national compartments within the fund and pool money, a parliament demand, Germany indicated at yesterday’s meeting that it hadn’t consented to dropping any key tenets of governments’ negotiating stance, according to the people, who aren’t authorized because the talks are private.