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.

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

Tackling obesity would boost economic and social well-being

Sudan: UN rights chief alarmed over ‘excessive force’, alleged use of live fire against protestors

What are the real debates surrounding immigration in an increasingly globalized world?

FROM THE FIELD: New sensors protect vulnerable Malawians against deadly lightning

Change is happening – and young people are leading the way forward

Greek citizens to pay the price again but Tsipras risks losing next elections

It’s time to ‘eliminate the scourge of conflict-related sexual violence’, urges UN chief

Violence will not deter Somali people in their pursuit of peace, says UN chief, in wake of lethal attacks

From sun-powered trikes to mind-controlled TV – 10 top gadgets unveiled at CES 2020

Third Facebook-Cambridge Analytica hearing: data breach prevention and cures

This electric plane has flown successfully for 30 minutes – is this the future of flying?

EU approves disbursement of €500 million in Macro-Financial Assistance to Ukraine

A Wholesome Health Care for Transgenders: Sex Reassignment Surgery

Germany: A grand coalition may trouble employers and bankers

Bank resolutions and recapitalisations by the ESM may end up politically swayed

There’s no vaccine for the infodemic – so how can we combat the virus of misinformation?

Cameroon: Clear ‘window of opportunity’ to solve crises rooted in violence – Bachelet

Water supply a human right but Greeks to lose their functioning utilities

Coronavirus: here’s what you need to know about face masks

An economist explains how to go carbon neutral in our lifetime

Coronavirus: Pandemic alert should be trigger for countries to do more against COVID-19

We need a fresh approach to climate change migration. This is why

As Houthi forces withdraw from key Yemeni ports, UN monitoring chief welcomes ‘first practical step on the ground’

Commission refers Denmark to the Court for failing to fulfil its obligations in relation to the name “Feta”

EU, Brazil to hold high level Summit in Brasilia

Summertime Consultation: 84% want Europe to stop changing the clock

In Rome you can swap plastic bottles for metro tickets

MWC 2016 LIVE: T-Mobile US reveals 5G trial plans

Localized microfactories – the new face of globalized manufacturing

GSMA Mobile 360: Connecting Cities, Connecting Lives, Connecting Europe

Protecting workers from biological agents: how to classify SARS-CoV-2

Nauru President warns of possible climate change ‘economic Armageddon’

“Private” sea freight indexes hide Libor like skeletons?

Time to be welcome: Youth work and integration of young refugees

Migrant workers sent more money to India than any other country last year

How the diaspora is helping Venezuela’s migration crisis

Gender inequality in the medicine field: two commonly issues

Meet Alice, the battery-powered plane that could herald the age of electric air travel

European Banking Union: no one is perfect

This graphene battery can recharge itself to provide unlimited clean energy

UN ‘stands in solidarity’ with cyclone-hit India – Secretary-General Guterres

Commission’s action plan: financial world mandatory links to environmental targets

Children are forgetting the names for plants and animals

What are plastics and why do they matter? An explainer

Turkey caught in a vicious Syrian circle bringing terror and war at home

Trump’s MAGA policy remains unchanged as EU warns to impose additional retaliation tariffs on US products

The first new university in the UK for 40 years is taking a very different approach to education

COVID-19: Single market must emerge stronger from the crisis, say MEPs

The Commission offers exit from the EU budget stalemate

Why banks escape from competition rules but not pharmaceutical firms

Korea should improve the quality of employment for older workers

Air pollution: How to end the deaths of 7 million people per year?

There is no patient safety without healthcare workers’ safety

The community and a decent working conditions for the young health workforce

Here’s what a Korean boy band can teach us about globalization 4.0

From a refugee camp to Davos: one Co-Chair’s story

‘Grave consequences’ await if new deadly escalation of violence in Gaza continues – top UN official

Asian and Pacific economies: decreases in tax revenue highlight need to broaden tax bases

Scotland in United Kingdom: It’s either the end or the beginning of the end

A young student discusses the determinants of migration in the European Union

More Stings?

Advertising

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