Tuesday

31st Mar 2020

Draghi: eurozone needs bank resolution fund

A eurozone banking union will need a common resolution fund, European Central Bank (ECB) chief Mario Draghi said on Monday (18 February) in the European Parliament.

EU lawmakers are currently finalising rules for a single supervisory mechanism (SSM) co-ordinated by the ECB. The European Commission is expected to table legislation for a resolution mechanism to wind up ailing banks within the coming months.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

Speaking with MEPs on the monetary affairs committee, Draghi said that the resolution fund should be financed via levies to safeguard against having to "recourse to taxpayer money."

However, the European Resolution Fund "should be backed by a public backstop mechanism" he added, to ensure that it would be "fiscally neutral over the medium term."

Although the need for a pan-European resolution fund is widely accepted among lawmakers, some countries fear it could lead to their taxpayers financing bank rescues in other countries.

Meanwhile, Draghi played down the recent diplomatic row over the exchange rate policy of the euro, dismissing as "excessive" talks of a currency war involving the eurozone, Japan and the US.

He commented that the ECB did not regard the eurozone exchange rate as "a policy target, but it is important for growth and price stability."

According to the bank's economic forecasts, the eurozone economy will fall by 0.3 percent in 2013, although Draghi indicated that he expected "a gradual recovery later this year."

EU summit lays out next steps for banking union

EU leaders have agreed to take further steps towards banking union including the legal minefield of how to wind up ailing banks and make sure the tax payer does not foot the bill.

ECB set to become more transparent

The European Central Bank kept its main interest rate at a historic low Thursday and indicated that in future the reasoning behind such decisions will be made public.

Draghi sceptical on German bank union plan

ECB boss Draghi has voiced scepticism on a German-led compromise on banking union, saying it could create a regime "that is single in name only."

Who pays the bills in a banking union?

The European Commission published the most important and eagerly awaited piece of the banking union puzzle on Wednesday but the backlash was predictable.

News in Brief

  1. 12-year old Belgian girl dies of coronavirus
  2. EU Commission: no 'indefinite' emergency measures
  3. Denmark plans 'gradual' return to normal after Easter
  4. Globally over 780,000 cases of coronavirus, 37,000 deaths
  5. EU states losing 3% of GDP a month, IMF says
  6. Fruit pickers need to cross borders too, EU says
  7. Former Slovak minister to become EU envoy on Kosovo-Serbia
  8. Hungary's Orban wins rule-by-decree vote in parliament

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Join EUobserver

Support quality EU news

Join us