EU Summit consumed by the banks

German Chancellor, Angela Merkel and French President, Francois Hollande holding a vivid discussion under the watchful eyes of the Belgian Prime Minister, Elio di Rupo (centre). (The Council of the European Union photographic library, 14-3-2013).

German Chancellor, Angela Merkel and French President, Francois Hollande holding a vivid discussion under the watchful eyes of the Belgian Prime Minister, Elio di Rupo (centre). (The Council of the European Union photographic library, 14-3-2013).

The Spring European Council made yesterday a timid step towards the introduction of more social content in the austerity programmes currently applied in the EU and a giant leap forward in constituting the EU banking union. The relevance and the practical implications of the texts on each one of those two issues included in the final Conclusions of Summit are very characteristic.

Not much for growth

A lot of space and words were devoted to exorcise unemployment and lament the lack of growth, however without much practical content. Unfortunately the 27 leaders were even driven officially and officiously up to the point to accept that economic policies cannot fight recession effectively nor increase employment as Herman Van Rompuy concluded (“Growth and jobs are not things governments can buy or summon”). Nobody stood up to tell his peers that in the case of banks it was with government decrees and laws voted in Parliaments, that the lenders were given trillions of euros for free. In this case economic policies worked alright.

Even more depressing was to see the political leadership of the European Union to go painstakingly into details when it came to the banking union. They concluded that “Progress towards a more integrated financial framework is urgently needed… Concluding the legislative process on the Single Supervisory Mechanism (SSM) within the coming weeks is a priority”. Obviously when it comes to banks everything is urgently and concretely laid down. If it is unemployment and recession our political leaders tell us that there is no much to do to confront them.

In short our leaders made a lot of practical conclusions, took care of the details and set strict time limits for action to be taken to safeguard the banking sector. A huge paragraph was inserted in the Conclusion of the Summit in favour of the financial sector. The text is revealing, that’s why it is quoted here below.

A lot for the banks

“As agreed in December 2012, an operational framework, including the definition of legacy assets, should be agreed as soon as possible in the first semester of 2013, so that when an effective single supervisory mechanism is established, the European Stability Mechanism will, following a regular decision, have the possibility to recapitalise banks directly. Agreement must be reached on the Bank Recovery and Resolution Directive and Deposit Guarantee Scheme Directive before June 2013, ensuring a fair balance between home and host countries. The Commission intends to submit by summer 2013 a legislative proposal on a Single Resolution Mechanism for countries participating in the SSM, to be examined as a matter of priority with the intention of adopting it during the current parliamentary cycle. It should ensure an effective framework for resolving financial institutions while protecting taxpayers in the context of banking crises, be based on contributions from the financial sector itself and include appropriate and effective backstop arrangements, in line with its conclusions of December 2012. The integrity of the Single Market will be fully respected and a level playing field will be ensured between Member States which take part in the SSM and those which do not”.

Obviously all those details about the recapitalisation of banks and the creation of a safety net for lenders going bust, was of prime importance. That’s why the Council not only went in details and took concrete measures on those issues but also set timetables for the practical realisation of all those decisions in favour of banks.

The Bank Recovery and Resolution Directive and Deposit Guarantee Scheme Directive are two new safety nets for the banking sector. In reality the banks will continue spinning around other peoples’ money. When in the short run their risky bets turn profitable, shareholders and managers pocket the wins. If those placements become sour and the bank is about to go bankrupt, those two new Directives will take care of depositors money and the possibility for a velvet resolution of the bank, God forbid.

In practical terms taxpayers will guarantee the deposits which will continue to be under the complete discretion of the banks, to do whatever they like with them. That was the main message of the Spring Summit of our 27 leaders. As for growth and employment a lot was said but nothing concrete was announced. The only difference from the last Summit was that this time much more space was devoted to those burning and socially sensitive issues in the text of the final Conclusions.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN says ‘many humanitarian achievements’, one year after ouster of ISIL from Mosul

Breaking news: Juncker’s Commission mutant trojan horse is on the loose in Strasbourg

The 4 types of leader who will thrive in the Fourth Industrial Revolution

Brexit talks: Today the world to hear of a predictable failure

EU to scrutinise foreign direct investment more closely

Unemployment and immigrants haunt the EU; who can offer relief?

Compensation for damages by the State for infringement of EU law: the European Commission refers Spain to the Court of Justice for its rules on the compensation for damages incurred by private parties

‘Growing alarm’ over Fall Armyworm advance, with cash crops ‘under attack’ across Asia

GSMA Mobile World Congress Americas

Mergers: Commission fines Canon €28 million for partially implementing its acquisition of Toshiba Medical Systems Corporation before notification and merger control approval

UN chief welcomes G20 commitment to fight climate change

4 steps to developing responsible AI

4 reasons why women should lead the G7 agenda in 2018

Why the merchant ships can pollute the atmosphere with CO2 quite freely

Data exchanges: Strengthening Europol cooperation with non-EU countries

Impressions of China

Economy and living standards of Gaza ‘eviscerated’ by crippling blockade – UN trade and development report

Migration crisis update: What are the chances of a fair deal at this EU Summit?

The time is up but the game is still not over for Greece: negotiations continue in anticipation of a new deal

Opposite cultures: Should it be a problem?

Changing for the change: Medicine in Industry 4.0

Climate Change : An Already Health Emergency

Bank resolutions set to remain a national affair

Scotland “shows the way” to separatist movements as Catalonia calls a vote on independence

Here are 3 alternative visions for the future of work

‘Global trust’ declining, ‘our world needs stepped-up global leadership’

Let Nagasaki remain ‘the last city’ to suffer nuclear devastation says museum director, as UN chief arrives

Primary Healthcare: Back to the Basics

This Netherlands football stadium creates its own energy and stores it in electric car batteries

Israel is joining forces with Arab states to save coral from climate change destruction

Globalization 4.0 must build a better world for working people

The G7 should take the lead on ocean targets for 2020

Algorithmic warfare is coming. Humans must retain control

Libya: EU efforts should focus on protecting migrants, MEPs say

Strengthening security through an EU-wide information system

New EU rules ensure better protection for 120 million holidaymakers this summer

Can the next financial crisis be avoided?

Imported and EU fisheries products should be treated equally

One billion people have preventable eye conditions, increasingly linked to lifestyle choices: UN health agency

War of words in Davos over Eurozone’s inflation/deflation

Parliament approves EU rules requiring life-saving technologies in vehicles

North Macedonia President, credits dialogue and diplomacy for setting a decades-long ‘name dispute’

10 ways central banks are experimenting with blockchain

The EU checks the multinationals for tax fraud but Britain may sail out of the EU via Panama

Why lay people don’t expect anything good from G20

UN launches plan to promote peace, inclusive growth in Africa’s Sahel

Medical research: between progress and speculation

We have to fight for a fairer tech industry for women

Humanitarian visas would reduce refugees’ death toll

More funds needed to counter ‘persistent and multi-faceted humanitarian problems’ in Ethiopia

Europe’s forests are booming. Here’s why.

Eurozone stuck in a high risk deflation area; Draghi expects further price plunge

The impact of refugees on the European healthcare system

Hospitals among seven health centres attacked in Syria’s north-east

3 charts that show the economics of European football

Germany to help China in trade disputes with Brussels

Colombia: Santos thanks the EU for its support to the peace process

Europe united in not supporting a US attack on Syria

The EU stops being soft with 10 Downing Street about Brexit

Draghi tells the EU Parliament his relaxed policies are here to stay

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s