Parliament toughens its position on banking union

European Parliament. Committee on Economic and Monetary Affairs (ECON) meeting, on “Eurozone banks supervision regime”. (In the forefront) Marino Baldini (S&D, HR) (second from left), Elisa Ferreira (S&D, PT), (third from left), Jean-Paul Gauzes, (EPP, FR) (second from right). Vote by a show of hands. (EP Audiovisual Services, 17 Dember 2013).

European Parliament. Committee on Economic and Monetary Affairs (ECON) meeting, on “Eurozone banks supervision regime”. (In the forefront) Marino Baldini (S&D, HR) (second from left), Elisa Ferreira (S&D, PT), (third from left), Jean-Paul Gauzes, (EPP, FR) (second from right). Vote by a show of hands. (EP Audiovisual Services, 17 December 2013).

The Conference of Presidents of the European Parliament reiterated the tough position of the legislative in relation to the Single Resolution Mechanism for failing banks. The SRM is meant to complete within the next four months the enactment of a real European Banking Union, according to the MEPs vision. In order to emphasise the decisiveness of the Parliament, its leaders underlined that, “If the negotiations do not move forward in a constructive manner, the EP reserves its right to put forward for adoption in plenary its first-reading position on the basis of the ECON Committee report”.

In detail, the Conference of Presidents (CoP), the leaders of the political groups, President Martin Schulz and the European Parliament negotiating team on the Single Resolution Mechanism (SRM), held an intensive discussion Thursday 16 January in Strasbourg on the state of play of the negotiations. The outcome of this meeting can be epitomised in the following passage of the Press release issued afterwards: “The Conference of Presidents and the negotiating team firmly reject the Intergovernmental Agreement approach on the SRM in the Council given that it undermines the Community Method and the Ordinary Legislative Procedure”.

Parliament sees a stalemate

It is obvious then that the “current state of play in the negotiations is not promising, given the wide differences between the Council and Parliament, meaning that no deal before the European elections in May is a distinct possibility”. This is something that the Council wants to avoid at any cost. The prospect of strong presence of Eurosceptic and extremist MEPs in the next Parliament after May elections may derail Berlin’s plans for a weak, ‘nationalised’ and politically biased European Banking Union. By the same token, the EU Parliament has decided that the SRM, being the second pillar of the banking union, should be politically unbiased and operate in complete transparency.

On the other side of the fence the Council, guided by Germany, on 18 December proposed “a draft regulation on the single resolution mechanism (SRM), and a decision by euro-area member states committing them to negotiate, by March 2014, an intergovernmental agreement on the functioning of the single resolution fund”. This is the usual way of resolving an EU matter outside the standard EU procedures, sidestepping the Parliament and the Commission. However the Parliament has to give an initial consent for this intergovernmental conference, a prospect which is not visible as things stand now.

Who pays for what?

In any case the resolution fund will be the key instrument of the SRM, because it will pay for the cost of a resolution. According to the compromise reached at the ECOFIN Council, this cost will be covered almost exclusively by resources of the member state where the bank is based. This arrangement will be in force for at least the first four to five years, after the Banking Union starts its operations. Then gradually the cost of winding down a bank will be progressively shared by all member states and only in the tenth year the national resolution funds will merge into one.

This arrangement will be realised through an intergovernmental conference. The basic characteristic of this system will be the initial ‘nationalisation’ of resolution cost and the political patronage of the entire procedure, as Germany wanted and Paris didn’t oppose. Obviously, Berlin and Paris couldn’t accept to outright undersign the obligations for the resolution of say an Italian or a Greek bank. On top of that, the entire process of deciding and effectuating the resolution of a bank, by being under political control, will presumably give the prerogative to Germany and France, the two politically strong core members of Eurozone.

This is what the present European Parliament wants to avoid and this is what the next Parliament will presumably deny. Add to that and a kind of ‘command’ issued by the German minister of Finance Wolfgang Schauble, who asked the Parliament not to delay its approval of the Council’s decision, and the final outcome is, a perfect stalemate.

The next weeks will produce very interesting developments. Currently the ball is theoretically in the hands of the Greek Presidency of the Council, expected to propose a way out. In reality though, it’s the Commission that has to come up with a solution to, at least partially, satisfy all parties.

Advertising

Advertising

Advertising

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

EU attempts to make new deal with Turkey as relations deteriorate

Intel, Almunia and 1 billion euros for unfair potatoes

Digital Single Market: Survey shows Europeans are well aware of rules against unjustified geo-blocking

Google’s hot summer never ends: EC to launch ANOTHER antitrust inquiry against the American giant

How close is the new financial Armageddon? IMF gives some hints

Online government services could change your life. But only if you have access to the internet

Commission launches debate on more efficient decision-making in EU social policy

ITU Telecom World 2017 on 25-28 September in Busan, Republic of Korea

How transparency can help the global economy to grow

‘Answer the call of Afghans’ to reduce impact of conflict, UN urges all parties amid increase in civilian airstrike deaths

The JADE Spring Meeting is about to begin

Is poor generational intelligence holding you back at work?

Engaging women and girls in science ‘vital’ for Sustainable Development Goals

Turkey: MEPs cut support by €70m due to no improvement in respect for EU values

Digital IDs and the Digital Economy: the (still) missing link?

JADE Testimonial #3: Sebastian @ Fundraising

Why schools should teach the curriculum of the future, not the past

Commission Vice-President Rehn exaggerates Eurozone’s growth prospects

A Wholesome Health Care for Transgenders: Sex Reassignment Surgery

Thousands flee fresh violence in South Sudan, many ‘suffering from trauma’

3 lessons from India in creating equal access to vaccines

FROM THE FIELD: Finding refuge in the ‘beautiful game’

Malaysia has achieved high levels of growth, but must do more to address governance and social challenges

How Eurozone consumers spend their income when they have one…

The EU now has rules that say household appliances must be easier to fix

COP21 Breaking News: China has promised to cut emissions from its coal power plants by 60% by 2020

Does the sharing economy truly know how to share?

Feeding families remains complex task in war-torn Syria – UN relief agency

This is how we inspire young people in the Middle East to join the fight against climate change

The banks want now free capital from taxpayers

Development aid drops in 2018, especially to neediest countries

Batteries can power sustainable development. Here’s how

UN chief urges Hamas and Israel to ‘step back from the brink of another devastating conflict’ in Gaza

Tuesday’s Daily Brief: #GlobalGoals progress, essential meds, updates from Cox’s Bazar, Sudan and DR Congo

Driving structural change through global value chains integration

Cryptocurrency mining could become the new face of energy storage. Here’s how

‘Democratic aspirations of the Sudanese people’ must be met urges Guterres, following military removal of al-Bashir from power

We’re all in the same boat on the SDGs. Here’s how we steer a course

What lies ahead for the Korean Peninsula?

Here are five tips to make your message clear in a crowded world

Silk Road Unlimited

EU consumer rules: Airbnb cooperates with European Commission and EU consumer authorities improving the way it presents offers

UN rushes to deliver aid as key Yemeni port city is ‘shelled and bombarded’

Let’s Learn

Pollinating insects: Commission proposes actions to stop their decline

EUREKA @ European Business Summit 2014: Innovation across borders – mobilising national R&D funds for transnational innovation in Europe

These are the world’s 10 most competitive economies in 2019

Deaf advocate voices importance of sign languages as UN marks first commemoration

India’s Largest Entrepreneurship Event is Back! (23-24th August 2016)

Crackdown on Christians in Eritrea spurs UN expert to press Government ‘to live up to its international commitments’

Failing to see reality or deceiving the masses? The EU about poverty and social exclusion

The Parliament rejects cultivating the wrong seeds of the Commission

More women than ever before are running for political office in the US

A Sting Exclusive: “Paris is the moment for climate justice”, Swedish MEP Linnéa Engström claims from Brussels

On youth unemployment: unemployment is even bleaker for youth with disabilities

International partners pledge $1.2 billion to help cyclone-hit Mozambique recover, ‘build back better’

Bahamas: ‘Clock is ticking’ to help those who lost everything in Hurricane Dorian, says UN

EU-US trade war? EU calls for logic while Trump’s administration is a loose cannon in a dangerous lose-lose situation for global prosperity

Idai disaster: Stranded victims still need rescue from heavy rains as UN scales up response

EU Parliament and Council: Close to agreement on the bank resolution mechanism

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