Friday Jan 30, 2015 Search
Weather | Athens
16o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Finance ministers fall short of bank-crisis fund deal sought by ECB

By Rebecca Christie, Corina Ruhe & Ian Wishart

European Union finance ministers claimed “good progress” after talks in Brussels as they worked to break a deadlock on a euro-area bank-failure law urgently sought by the European Central Bank.

The EU is searching for a compromise on the Single Resolution Mechanism and an accompanying common fund to cover the cost of saving or closing banks. ECB President Mario Draghi last week warned that failure to reach a deal before May’s European Parliament elections would have severe consequences for the euro zone and its fledgling banking union.

Dutch Finance Minister Jeroen Dijsselbloem said no conclusions were reached on rules for decision making by the proposed bank-failure authority. The questions of how quickly to build up the fund, and when and how it could tap financial markets, also remain open. Ministers resume talks today.

“We will have to look for further strengthening of proposals” concerning the proposed fund’s liquidity, said Dijsselbloem, who leads the group of euro-area finance ministers. EU member states and the European Parliament want a deal by the end of March, he told reporters after the meeting.

German Finance Minister Wolfgang Schaeuble, whose nation has led resistance to the parliament’s demands, declined to comment after the meeting. French Finance Minister Pierre Moscovici said Germany wasn’t far from accepting a proposed eight-year timetable for building up the new fund.

The SRM is part of an EU effort to prevent future financial crises by pooling responsibility for euro-area banks. A blueprint put forward last year by Michel Barnier, the bloc’s financial-services chief, would create a central agency backed by a 55 billion-euro ($76 billion) fund financed from industry levies.

“This week is critical,” Barnier said in a statement after the meeting. “I believe that a compromise is within reach on the great majority of topics under discussion.”

Dijsselbloem said ministers were able to agree on some elements of the plan, such as how to assign burden-sharing fairly in cross-border failures that involve a bank’s home country and nations that host its subsidiaries. He said ministers also worked out a compromise on how the new plan will incorporate EU rules on when regulators can force bank creditors to take losses.

Ministers also debated how to handle national compartments that will exist within the fund during its start-up period, which could be as long as 10 years.

“There is the possibility of lending or borrowing between the compartments,” Dijsselbloem said. “That is a decision to be taken by the fund. Member states can object during the transitional period, but only under a limited number of conditions. Otherwise it’s simply at the board’s discretion.”

Negotiators for the European Parliament and EU member states have made scant progress on a compromise text of the SRM bill, with time running out before the assembly adjourns for elections in May. The two sides made proposals late last year, and both must approve any final legislation for it to enter into force.

The next round of negotiations between parliament and Greece, which holds the EU’s rotating presidency and represents the interests of member states, will be held on March 12.

The ECB assumes full oversight of euro-zone banks in November, and Draghi made clear that the central bank wants to work with a single resolution agency when lenders get into trouble. The SRM is part of an EU effort to prevent future financial crises by pooling responsibility for euro-area banks.

“If we do not have one SRM, the responsibilities for resolution will remain national, and so we will have a misalignment of responsibilities,” Draghi said on March 6.

Parliament negotiators said last week that they would make a “last attempt” to broker a deal with Greece, which holds the EU’s rotating presidency and represents the interests of member states in the talks. Greece has set a March 26 deadline for an agreement.

“We cannot sign off on a deal which establishes a mechanism which is unfit for purpose,” Elisa Ferreira, the parliament’s chief negotiator on the SRM, said on March 5. “A potentially unworkable resolution system will jeopardize banking union and leave taxpayers exposed.”

[Bloomberg]

ekathimerini.com , Tuesday March 11, 2014 (10:59)  
Berlin: Greek aid extension only makes sense if Athens upholds reforms
Pimco says Greek bonds illiquid, volatile until accord reached
Draghi deflation challenge underlined as prices plunge by record
Greek bonds rise a second day after debt negotiation assurances
Ex premier Karamanlis said to reject SYRIZA offer for presidential candidacy
Former conservative premier Costas Karamanlis has rejected an overture from the SYRIZA-led government for him to be a candidate in another round of presidential elections next month, Kathime...
Greek cleaners show dichotomy of Tsipras as markets tumble
On a sunny Wednesday morning in Athens, two days after Alexis Tsipras became Greek prime minister, workmen dismantled the barricades that had protected the Parliament and its ceremonial guar...
Inside News
SOCCER
Olympiakos draws AEK in Cup quarterfinals
The dream draw of Olympiakos vs AEK in the quarterfinal materialized on Friday, as two of the capital's three giants will face off in a two-leg tie for a place in the semifinals of the Greek...
BASKETBALL
Below-par Olympiakos succumbs to Efes
The winning streak of Olympiakos in the second group stage of the Euroleague ended on Thursday in Turkey, as Anadolu Efes outclassed the Reds in the second half to win 84-70. Olympiakos had ...
Inside Sports
INTERVIEW
SYRIZA must come up with ‘pragmatic solutions,’ Schulz tells Kathimerini
“SYRIZA must realize that it is now the Greek government, not a party running an election campaign,” European Parliament President Martin Schulz, the first European official to visit Greece ...
COMMENTARY
Strange haste
The members of the new government must have a lot of confidence in themselves. Several days before announcing his program, Prime Minister Alexis Tsipras and his cabinet have opened up a mult...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Ex premier Karamanlis said to reject SYRIZA offer for presidential candidacy
2. Berlin: Greek aid extension only makes sense if Athens upholds reforms
3. Pimco says Greek bonds illiquid, volatile until accord reached
4. Greek cleaners show dichotomy of Tsipras as markets tumble
5. Draghi deflation challenge underlined as prices plunge by record
6. Greek bonds rise a second day after debt negotiation assurances
more news
Today
This Week
1. SYRIZA must come up with ‘pragmatic solutions,’ Schulz tells Kathimerini
2. Why Greece went left while Europe turns to right
3. Greek government's signals very mixed, ECB's Jazbec says
4. EU's Schulz: Greece should follow EU line on Russia
5. Capital flees Greece at fastest pace since 2011
6. Monastiraki restaurant fire prompts panic, restricted before spread
Today
This Week
1. Greek Elections 2015 | LIVE
2. SYRIZA heads for historic victory but without majority
3. Greek Elections 2015 | LIVE
4. Greek Elections 2015: The day after | LIVE
5. Poll shows SYRIZA leading ND by 4 pct
6. SYRIZA's win will test institutions
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.