28th Oct 2016


Greece, banking union and Putin dominate this WEEK

  • All smiles? Vladimir Putin will make his first visit to Brussels since Ukraine's decision to abort EU trade talks (Photo:

Russian President Vladimir Putin will be in town on Tuesday (28 January) for the 32nd EU-Russia summit, with the volatile situation in Ukraine likely to be the elephant in the room.

Relations between Moscow and Brussels have been strained since Ukrainian President Viktor Yanukovych's decision in November to turn his back on a trade and political agreement with the EU in favour of closer trade ties with Russia. Although Yanukovych was rewarded with an €11 billion bailout from Russia, the move has sparked weeks of pro-EU demonstrations in Kiev during which a handful of protesters have been killed.

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On Wednesday, the European Commission will publish proposals on the EU's banking sector aimed at ensuring a separation of the activities of financial institutions and reducing excessive risk-taking by lenders.

Leaked versions of the draft law suggest that the EU executive is proposing to forbid big banks from proprietary trading, when banks take bets on markets with their own money rather than with a customer's. Other types of trading such as complex securitisation and derivatives may also have to be separated from a bank's deposit-taking arm.

However, a group of countries, led by France, Germany and Italy, are believed to want to water down the proposals to prevent their biggest banks from being broken up.

Eurozone finance ministers will meet in Brussels on Monday (27 January) for the Eurogroup, before all 28 EU ministers convene on Tuesday.

Tuesday's meeting will be the first to be chaired by Greece finance minister Yannis Stournaras, whose country holds the six month EU presidency, but Stournaras will be under pressure to explain why Greece’s talks with troika inspectors have not progressed.

The troika - which represents Greece's creditors - began the latest inspection of Greece’s progress in the implementation of its bailout programme in September 2013. However, talks have stalled since then and officials have not yet approved the disbursement of the next tranche of a rescue loan to Greece.

With the weeks now counting down to the end of the legislative term, banking union inevitably remains high on the EU agenda.

On Tuesday, officials representing the EU institutions and national governments will meet for an intergovernmental conference aimed at drafting the terms of the treaty that will create a single resolution fund for banks.

Ministers agreed in December that the use of a fund to cover the costs of resolving failed banks would have to be governed by an intergovernmental agreement. MEPs in the European Parliament - who would be shut out of the decision making - are opposed to the arrangement.

National officials are hoping to agree on a final text by the end of February, leaving ministers to sign off on the treaty in March.

Also on Tuesday, MEP and ministers will reconvene for the third "trialogue" as they seek to reach a deal on the single resolution mechanism.

Elsewhere, the parliament's ongoing inquiry into the role of the troika will continue in Brussels, with hearings by deputies on the employment and social affairs committee.

The two co-rapporteurs of the inquiry, Austrian Othmar Karas and France's Liem Hoang Ngoc, will arrive in Athens on Wednesday (29 January) for a three-day visit with government officials and social partners.

Officials are also likely to discuss the ongoing anti-trust case against energy giant Gazprom and a series of ongoing trade disputes between the two blocs.

Poland defies EU on rule of law

Prime minister Szydlo said the European Commission concerns over rule of law in Poland were political grudges.

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