FRANKFURT: Europe should not delay signing off on a scheme for salvaging or shutting failing banks until it has changed basic EU law, the European Union’s top regulatory official said on Friday in a veiled criticism of Germany.
Speaking in the country’s financial centre, Frankfurt, Michel Barnier underscored the need for swift action in finalising plans to close or salvage failed banks — a crucial pillar in a framework to jointly deal with stressed lenders across the eurozone.
Germany, whose support for the banking union is critical because of its economic strength, has called for changes to the EU treaty or basic law to underpin the project in the long term. It is a demand that some diplomats fear is a tactic to hold up a project that Berlin fears could leave it on the hook for failed banks in Spain and elsewhere.
“We need an agreement now and we can’t wait for a new treaty,” Barnier told journalists, adding that in the long term, such a change to the EU’s basic law “will be a good thing to make this system more solid and more precise”.
“We have to find a solution now. The next financial crisis is not going to wait for us,” he said, adding that he was open to compromise on the shape of a deal.
Barnier’s remarks come days after his offer to resolve another German concern about the scheme to tackle failed banks was slapped down by Germany’s finance minister, Wolfgang Schaeuble.
In its blueprint, the European Commission has suggested that it has a role in shutting down an ailing bank — a proposal that has irritated Germany, which wants to keep more national autonomy.
Barnier, who is in charge of writing financial regulation, earlier this week offered a compromise by saying that any role for the Commission could be temporary. But Germany immediately rejected that idea.
The first leg of banking union, seen by many as Europe’s most ambitious scheme since the start of the single currency, is established next year when the European Central Bank takes on supervision of at least 130 big banks.
Reuters
