Saturday August 2, 2014 Search
Weather | Athens
31o C
24o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
EU leaders commit to resolution mechanism for banks, closer union

By Luke Baker & Paul Taylor

European leaders agreed to press on with further steps to shore up their finances and sustain momentum in tackling the debt crisis on Friday, a day after clinching a deal on banking supervision and approving long-delayed aid to Greece.

After more than eight hours of late-night talks at a summit in Brussels, leaders promised to push ahead with setting up a mechanism to wind down problem banks, although it was unclear when the facility would be completed.

They also launched tentative discussions on how to make countries stick to economic targets and on creating a solidarity fund to help member states suffering one-off economic shocks, but did not delve deeply into either issue, pushing the debate out to the middle of next year.

With officials concerned about complacency creeping into decision-making now that financial markets have calmed and the crisis seems less acute, leaders appeared intent on showing that they are not relaxing.

That said, no concrete decisions were taken at the summit. Instead, it was more about verbal commitments to push ahead.

"This evening we decided to put in place a single resolution mechanism, Herman Van Rompuy, the president of the European Council and chairman of the summit, told a news conference.

The European Commission will present a proposal on the mechanism, which would wind-up troubled banks by keeping the good parts alive while the unhealthy operations are shut down, during 2013, Commission President Jose Manuel Barroso said.

French President Francois Hollande told reporters the mechanism would see the light of day during the year, but it was not clear whether he expected it to be functioning by then or merely be in the early stages of construction.

"We agreed a roadmap for the future development of the currency union, said German Chancellor Angela Merkel, without going into detail about the discussions.

The two-day summit, the sixth and last of 2012, had only ever been intended to be a detailed discussion on how best to overhaul economic and monetary union and correct the problems that have fuelled three years of debt crisis.

The meeting was held just hours after EU finance ministers achieved a significant breakthrough in negotiations over a 'banking union' by agreeing that the European Central Bank would be made the chief supervisor of euro zone banks.

That decision, and another by euro zone ministers to release up to 50 billion euros in new aid to Greece, marked two positive developments after a long year of crisis-management and took some of the pressure off leaders to make major strides.

ECB President Mario Draghi hailed the deal on banking supervision, the first stage towards a banking union with more pooled sovereignty, as an important step towards a stable economic and monetary union.

Under the deal, officials said the ECB would regulate some 150 to 200 banks directly - all major cross-border lenders and state aided institutions - with the power to delve into all 6,000 banks in case of problems.

Olli Rehn, the EU commissioner for economic and monetary affairs, said Cassandras who had predicted disaster for the euro and a Greek exit had been proven wrong.

But there is little time to relax. The next stages of banking union - creating a resolution fund for winding up troubled banks and coordinating deposit guarantees to protect savers - may be fought over even harder. And then there will be political and financial hurdles to negotiate through the year.

"The fact that the situation in the financial markets is now better than before should not be seen by the governments as a way to procrastinate, European Commission President Jose Manuel Barroso told reporters.

Much of southern Europe faces another year of grinding recession with record unemployment and deepening poverty that will tear at the fabric of wounded societies and may push governments' efforts to reduce deficits further off course.

With Silvio Berlusconi vowing to contest an Italian election early next year, a full bailout of Spain still on the cards and a German election in September casting a long shadow, 2013 promises to be the EU's fourth turbulent year in a row, even without risks from bailout victims Greece, Ireland and Portugal.

Italy is a particular concern if the next government rows back on any of the economic reforms put in place by technocrat Prime Minister Mario Monti, whose time in office has helped stabilise financial markets and stave off the crisis.

Several participants at a pre-summit meeting of centre-right leaders in Brussels urged Monti to stand as a candidate in an election expected in February, but he gave no indication of his intentions, a person at the meeting said.

Many European leaders fear a return of the erratic billionaire Berlusconi, who abruptly changed course on Wednesday, saying he would step aside if Monti agreed to lead the centre-right into the election.

[Reuters]

ekathimerini.com , Friday December 14, 2012 (10:09)  
Libya evacuees set to reach Piraeus on Saturday
Coast guard seeks boost in Aegean
Coalition agrees strategy for target of 5,000 dismissals in public sector
Illegal buildings in crosshairs
Greek PMI drops to nine-month low in July
The return to growth of the manufacturing sector proved short-lived, as the Purchasing Managers Index (PMI) dropped to a nine-month low in July to 48.7 points, against 49.4 points in June, a...
Property tax surplus may lead to more installments or cuts
The government is considering an increase in the number of installments allowed for the payment of the new Single Property Ownership Tax (ENFIA) for 2014 and to reduce its size from 2015 if ...
Inside Business
SOCCER
One win and one loss in Europa League
Greece had a hit and a miss in the first-leg games for the third qualifying round of the Europa League on Thursday, as Atromitos scored a 2-1 win at Sarajevo while Asteras Tripolis lost 1-0 ...
SOCCER
Goalless draw at Liege puts Greens in driving seat
Panathinaikos got the upper hand in the battle for entry to the Champions League playoffs after snatching a goalless draw at Standard Liege on Wednesday. If anything, the Greek cup holders m...
Inside Sports
COMMENTARY
In trying to conquer, Putin unites Europe
President Vladimir Putin is obliged to feign indifference to the sanctions that the European Union and the United States imposed on Russia this week. But, being the player that he is, he mus...
EDITORIAL
Our own worst enemies
A new study has come to exemplify the cliche notion that Greeks find it easier to excel abroad, where they fare much better than they do at home. According to research by epidemiologist John...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Greek PMI drops to nine-month low in July
2. Property tax surplus may lead to more installments or cuts
3. Athens-Patra in just two hours
4. Plans to tackle Russian crisis
5. Fifth straight day of losses on Greek bourse
6. Libya evacuees set to reach Piraeus on Saturday
more news
Today
This Week
1. Greece evacuates embassy staff, foreign nationals from Libya
2. Greek exporters worried about impact of Russia sanctions
3. Greek bond yields dip as investors anticipate ratings upgrade
4. Britons stranded at sea off Zakynthos towed to safety
5. Human rights watchdog criticizes decision to file Farmakonisi case
6. Jean-Claude Juncker to make first official visit to Athens on Monday
Today
This Week
1. Wine cup used by Pericles found in grave north of Athens
2. Defense Minister Avramopoulos to represent Greece at European Commission
3. Worlds largest solar boat on Greek mission
4. What lessons can we draw from antiquity?
5. Greece names fifth privatization agency chief in four years
6. Greek coast guard picks up 77 migrants off Myconos
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.