Saturday

24th Jul 2021

Next EU summit risks being waste of time, MEPs say

  • A central authority with the power to shut down banks - a nice idea in principle but less so in reality, say key member states (Photo: William Murphy)

The European Commission on Wednesday (12 June) came under pressure to be a bold policy-maker, as a meeting of EU leaders later this month shapes up to be another damp squib.

Deputies in the European Parliament urged the commission to table far-reaching proposals on banking union - a three-pillared plan seen as key to establishing and maintaining a stable eurozone.

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"Exactly the same mistakes are happening again," said Belgian Liberal MEP Guy Verhofstadt about member states getting complacent.

Dutch Liberal MEP Marietje Schaake said "lack of leadership" meant structural problems in the banking sector "remain unresolved."

French centre-right MEP Joseph Daul referred to the several past summits where decisions have been taken but only implemented "very slowly."

Yet the "meetings keep coming," he noted.

"I want controversy" said independent Spanish MEP Francisco Sosa-Wagner, urging commission chief Jose Manuel Barroso to be ambitious.

Leaders first agreed the need for a banking union a year ago as a way of breaking a link that sees failing banks burden governments with more debt.

While plans for a single supervisor to oversee eurozone banks is underway, a recent Franco-German paper all but bins the other pillars of the bank union. It makes vague reference to a weak-sounding resolution board involving national resolution authorities (meant to wind up failing banks) and no reference to a eurozone-wide deposit guarantee scheme.

The paper reflects both the general fact that the eurozone is no longer under such market pressure and the Berlin-specific fear that German taxpayers will be the hook for banking problems in other countries.

The commission for its part is supposed to be tabling a proposal on a central resolution authority, in principle handing Brussels the power to shut down ailing lenders, even if their home state objected. It has indicated the plans will be published on the eve of the 27-28 June summit

But there are fears that the proposal will be delayed and weakened, although commissioner Michel Barnier, in charge of the dossier, has acknowledged the importance of both a resolution authority and "and hopefully a common fund one day."

Answering MEPs' charges, economic affairs commissioner Olli Rehn said it was "not correct" to say that the commission is delaying the proposal.

"We have made sound and steady progress," he noted.

Meanwhile, euro deputies also expressed concern that measures to tackle Europe's youth unemployment will also amount to little.

The summit has been billed as an opportunity to "mobilise efforts at all levels ... to get [the 6 million] young people back to work," but initiatives have been few and under-funded.

"There is only one answer to the growing anger of citizens and that is an active fight against youth unemployment," said Austrian Socialist Hannes Swoboda.

MEPs say the €6 billion that member states have earmarked for youth unemployment in the EU's 2014-2020 budget "is nowhere near enough."

A youth guarantee scheme agreed earlier this year has yet to be fully implemented.

Deputies also doubt member states' commitment to creating economic growth and jobs as governments have fought hard against a proposal by MEPs to allow flexibility in the multi-annual budget so that unspent money each year can be re-allocated to areas that need it.

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