adminsupervision deal.They gather after their finance ministers agreed a complex bank supervision deal overnight, a key step towards a banking union which they hope will ring-fence banks in trouble to prevent future crises.
On the agenda is an ambitious blueprint to improve the workings of the EU through increased economic and political integration, leading ultimately to greater powers for its institutions at the expense of national governments. For European Council president Herman Van Rompuy, the key words are “deeper integration and reinforced solidarity” in a programme to take the EU towards completion of its Economic and Monetary Union.
For some member states, some proposals belong in the “impossibly distant future”, but the issues involved cannot be dismissed since they go to the heart of the EU’s future and Van Rompuy has pressed for full consideration of them.
The 17 eurozone finance ministers, meanwhile, turn to Greece to review a debt buy-back scheme and see if Athens has done enough to finally release long-delayed bailout funds needed to avert a Greek debt default.
German Chancellor Angela Merkel said yesterday that she hoped the Greek funding would go through after the buy-back, designed to cut Greece’s overall debt by about US$26 billion and put it on a sustainable basis.
Cyprus, current holder of the EU’s rotating six-month presidency and seeking a bailout accord of its own, is also on the agenda, but Eurogroup head Jean-Claude Juncker said he expected no deal on its request until January.
If Greece gets the go-ahead, EU leaders can go into the summit hopeful that they have made real progress in resolving a debt crisis which has brought the economy to its knees after three gruelling years.
The new Single Supervisory Mechanism (SSM) for the eurozone agreed in the early hours of yesterday will come under the European Central Bank which will co-ordinate oversight with national authorities.
The ECB will also work in tandem with the London-based European Banking Authority, which covers all 27 EU states.
The “overall aim is to restore confidence in the banking sector”, said the meeting’s chair, Cyprus Finance Minister Vassos Shiarly, describing the accord as a “Christmas present for the whole of Europe”.
From March 2014, banks with assets of more than 30 billion euros or equal to 20 percent of a state’s economic output will come under the ECB remit.
The ECB will also have the right to intervene in cases involving smaller banks but it is expected that national supervisors will have the main responsibility in this category. Merkel, who had stressed the need for a measured approach starting off with only the major banks, said the deal was a major step in the right direction.
“It cannot be valued highly enough that eurozone finance ministers agreed overnight on a legal framework and the outlines of a common supervisory mechanism for banks,” Merkel told German lawmakers.
EU Financial Markets Commissioner Michel Barnier said the deal was a “first stage”, to be followed next year by proposals for a winding up facility for banks that cannot be fixed and a deposit guarantee system.
The ECB would directly supervise some 200 of the biggest of the estimated 6 000 eurozone lenders under the scheme, he said. — AFP.
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