Thursday April 17, 2014 Search
Weather | Athens
15o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Schaeuble must compromise on bank-failure plan, says EU lawmaker

German Finance Minister Wolfgang Schaeuble needs to accept a more centralized euro-area system for handling stricken banks or risk jeopardizing the plan, said Corien Wortmann-Kool, a senior European Parliament lawmaker.

A Schaeuble-backed blueprint for the Single Resolution Mechanism, a proposed authority for saving or shuttering banks, would be a recipe for failure, Wortmann-Kool said. His vision, enshrined in a plan agreed on last month by European Union finance ministers, is too segmented along national lines and too cumbersome, she said.

The ministers’ proposal sets out a ladder of decision- making authority and lays the groundwork for a central fund to cover resolution costs, filled by bank contributions and set up via an agreement among participating nations. Talks on the legislation have begun between the EU parliament and Greece, which holds the bloc’s rotating presidency and represents the interests of member states.

“We cannot just support a system with high risks that it will not work,” Wortmann-Kool said in an interview in Brussels on Tuesday. “The system as a whole might not function.” She is a Dutch vice president of the European People’s Party, to which Schaeuble also belongs.

Bank resolution rules are a cornerstone of the EU’s effort to create a banking union and prevent another financial crisis that fuels contagion between nations and private-sector lenders. The European Central Bank this year is taking on new duties as the euro-area bank supervisor.

Wortmann-Kool’s warning follows a meeting that she and other EU Parliament members had with Schaeuble on Jan. 20 and signals the hard line that the assembly intends to pursue in the SRM talks.

The EU is racing to finish work on the SRM before mid- April, when the parliament adjourns ahead of elections the following month. The draft legislation requires the support of the Parliament and national governments to take effect.

“I have to admit I remain pessimistic after the meeting with minister Schaeuble,” she said. He “didn’t give the impression that he is prepared to move.”

German Finance Ministry spokesman Martin Kotthaus confirmed that Schaeuble met privately with EU lawmakers on the SRM and banking union.

Finance ministers want to create the bank-resolution authority and fund in EU law, while setting out the financing arrangements for the fund in a separate intergovernmental agreement that would cut the parliament out of the process. Germany has insisted on this separation to avert domestic legal conflicts.

In testimony to parliament before her appointment to the ECB’s Executive Board, Sabine Lautenschlaeger pointed to potential “legal problems” for the resolution fund in Germany “connected to paying into a fund without having ever the chance to get paid out of it.”

In the ministers’ plan, the fund would be filled over 10 years. In the meantime, the system would be based on national pots of money, limiting the scope for cross-border help. The resources would be tapped once losses had been imposed on private creditors.

Wortmann-Kool, whose group is the biggest in the 766-seat parliament, said that she has “some sympathy” for Germany’s legal concerns while asserting that these could be addressed without compromising the European character of the system.

“The extremely rigid approach with regard to national compartments makes it impossible in a single resolution case to really use this money when needed,” she said.

While both sides are keen to reach a deal in time for the parliament to vote in April, Wortmann-Kool said the assembly was prepared to abandon the fast-track process in order to ensure a centralized system and streamline decision-making.

“Better some months more to have a good system instead of a bad system already right now,” she said.

Such a step would probably leave a final decision on the SRM to the next parliament. EU President Herman Van Rompuy said this week that the SRM would face a one-year delay if an agreement isn’t reached in this parliamentary term.

“After the European elections, the situation can be more polarized and it can be more difficult to reach an agreement,” Van Rompuy said on Jan. 20.

Wortmann-Kool said she is emboldened by support for a more centralized SRM by all the parliament’s main political groups, including Socialists, pro-business Liberals and Greens, as well as by ECB President Mario Draghi.

“We stand very firm,” she said. “Our position is strong.”

[Bloomberg]

ekathimerini.com , Wednesday Jan 22, 2014 (11:47)  
Greek current account deficit widens in February
National Bank of Greece plans senior unsecured bond sale
Yield on first post-default Greek bond falls to issuance level
Greece startup leaders say they can’t break jobless cycle alone
Lafazanis denies speculation of rift within SYRIZA party
SYRIZA MP Panayiotis Lafazanis, who leads the man opposition party's so-called Left Platform, on Thursday sought to play down reports of a heated argument with party leader Alexis Tsipras du...
Homemade bomb targets car of deputy Parliament speaker´s wife
A homemade explosive device on Thursday destroyed the car of deputy Parliament Speaker Giorgos Kalantzis's [photo] wife. The vehicle was parked outside the couple's home in Kavala, northern ...
Inside News
SOCCER
Greek soccer turns fishier than ever
Soccer in Greece reached new lows in scenes unseen since the national team’s triumph in Euro 2004, as PAOK and Olympiakos served up a cup semifinal with PAOK emerging as the winner and the s...
BASKETBALL
Greens within a whisker of upsetting CSKA Moscow
Panathinaikos came mighty close to snatching home advantage from CSKA Moscow in Game 1 of the Euroleague play-offs on Wednesday, but eventually succumbed to its host in Russia in overtime, w...
Inside Sports
COMMENTARY
Ukraine is a crisis—but not a Cold War
Given Russia’s annexation of Crimea, the imposition of US and European sanctions, and the potential for more escalation in Ukraine, we are witnessing the most important geopolitical events s...
EDITORIAL
Transparency of political party funding
Ensuring transparency in the funding of political parties and the manner in which they choose to spend their funds are crucial to the smooth functioning of our democracy. After all, most of ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Lafazanis denies speculation of rift within SYRIZA party
2. Greek current account deficit widens in February
3. National Bank of Greece plans senior unsecured bond sale
4. Yield on first post-default Greek bond falls to issuance level
5. Homemade bomb targets car of deputy Parliament speaker´s wife
6. Wearing crowns of thorns, cleaning ladies hold protest at Finance Ministry
more news
Today
This Week
1. Greece startup leaders say they can’t break jobless cycle alone
2. Ground-breaking Good Friday mass signals thaw in Cyprus
3. Seven arrested over Toumba violence
4. Mayoral candidates clash over Athens mosque plans
5. Homemade bomb targets car of deputy Parliament speaker's wife
6. Wearing crowns of thorns, cleaning ladies hold protest at Finance Ministry
Today
This Week
1. Bomb explodes outside Bank of Greece
2. Time to take a hard look at debt sustainability, says OECD chief
3. For faith and country
4. CCTV footage from Nigrita Prison shows signs of inmate torture [Video]
5. Car bomb explodes outside Greek Central Bank building, no one hurt [Update]
6. Samaras sees no need for third bailout
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.