Monday

23rd Jan 2017

Analysis

Germany out on top after late-night summit

  • The German Bundestag will have a say each step of the way when setting up the banking union (Photo: BriYYZ)

EU leaders left Brussels Friday (19 October) after having spent the best part of the meeting tweaking wording on a banking union that was supposed to have been clear in June.

They went back to their hotels at a bleary-eyed 3am on Friday. But for all the lengthiness, the end result was practically the same for Berlin - the European banking supervisor will not be up and running any time soon.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The issue is key. Without the supervisor, the eurozone bailout fund will not be allowed to directly recapitalize ailing banks.

Speaking after the summit, German Chancellor Angela Merkel - who has been pushing for more fiscal discipline among member states before she will accept opening up German coffers - said that there was a clear order of tasks to follow.

A legal basis should be set out by the December meeting of EU leaders, with finance ministers tasked to do the job.

Then comes the building up of the supervisory authority. Only when this is “able to work” can direct bank recapitalization begin.

While the concluding statement says that “work on the operational implementation will take place in the course of 2013” there are many potential pitfalls on the way.

Merkel acknowledged as much saying that alone trying to have a legal framework in place by 1 January 2013 is “very ambitious.”

Then there have to be negotiations with the European parliament. And then up to 300 staff will be needed for the new body.

“These people have to be found. They have to be employed," said the chancellor.

It is also still unclear how the new supervisory authority would work with the existing European Banking Authority - a body co-ordinating work of all EU national supervisors - or how to deal with non eurozone countries that have banks in euro countries.

Meanwhile not all of the 6000 eurozone banks are equal. They will be supervised in a “differentiated” manner, with some remaining under the oversight of national authorities.

And aside from the legal and political questions at the European level, there are potential domestic hiccups. Each step of the way, Geman MPs will have to give the green light

According to Merkel, they will have their say when the legal framework is produced, when the supervisory body is considered up and running and when it comes to requests for the eurozone bailout fund (ESM) to recapitalise banks.

There has been much speculation about whether the chancellor is delaying the banking union question until after the general election next September. She herself noted that one expert suggested the functioning supervisory authority would probably be in place only at the beginning of 2014.

But Merkel said she had "never even thought about that."

Still there was a burst of laughter when she mistakenly said that the banking supervisor would not be in place before 2030. She quickly corrected herself to 2013.

EU should raise own taxes, says report

A group chaired by former Italian PM and EU commissioner Mario Monti says Brexit should be used to create EU-level levies to depend less on member states contributions, and to abolish member states rebates in the EU budget.

Stakeholders' Highlights

  1. Caritas EuropaEU States to Join Pope Francis’s Appeal to Care for Migrant Children
  2. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  3. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  4. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  5. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  6. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  7. European Free AllianceMinority Rights and Autonomy are a European Normality
  8. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  9. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  10. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  11. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!
  12. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey