25th Mar 2018

Merkel coalition partners side with MEPs on EU bank fund

  • Schaueble's banking union demands have come under criticism from his party's coalition partners (Photo:

Hard fought concessions won by German finance minister Wolfgang Schaeuble on the EU's banking union plans have come under friendly fire from his social democrat coalition partners.

Under a painfully agreed compromise reached in December to accommodate Schaueble's demands that the German taxpayer should not be put on the hook for bank liabilities across the eurozone, a single resolution fund to eventually be worth €55bn, will be built up over a ten-year period.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Meanwhile, its use will be subject to the terms of an intergovernmental agreement which puts the emphasis on national governments covering the costs of their own banks.

National finance officials held their first formal negotiations on the terms of the agreement in Brussels earlier this week and hope to complete the text in time for ministers to sign it off in early March.

The single resolution fund, combined with a new authority tasked with deciding whether and when to shut down a bank, is the centrepiece of the EU's ambitious banking union framework.

However, in a letter to the European Parliament released on Friday (31 January), SPD finance spokesman, Carsten Schneider, criticised the 10-year transition period as much too long and the complex decision-making structure which could see several hundred officials involved in deciding on a bank's future.

"The aim must be to establish the fund as a European fund as quickly as possible, and to move away from the complicated interplay between the compartments and the common fund," he said.

He also called for the fund to be allowed to borrow on the financial markets.

Although Schnieder's criticisms are unlikely to alter Berlin's negotiating position, it raises clear tensions within chancellor Angela Merkel's government. The social democrats joined Merkel in a 'grand coalition' after the Free Democrats, Merkel's previous coalition partners, were wiped out in last October's Bundestag elections.

It will also offer hope to MEPs, as well as a number of other EU finance ministers, who support a more ambitious time-frame and clearer structure for the fund.

Although the parliament has no powers to block an intergovernmental agreement between governments, its support is required to agree the regulation which includes the bulk of the reforms.

MEPs and representatives of the Greek EU presidency will hold their fourth 'trialogue' meeting aimed at brokering a deal in Strasbourg next week, with the parliament's negotiating team threatening to hold the package up until the next legislative term unless they secure concessions.

MEPs are demanding a fully mutualised fund by 2018 and a centralised resolution authority. They also want the fund to be able to tap the markets as well as the EU's €500 billion bailout fund, the European Stability Mechanism.

Meanwhile, in a letter to European Commission president Jose Manuel Barroso in January, deputies issued a joint statement saying the parliament "firmly rejects" plans for a third intergovernmental treaty in less than three years.

"The current state of play in the negotiations is not promising, given the wide differences between the Council and Parliament, meaning that no deal before the European elections in May is a distinct possibility," added MEPs.

Commission sticks to its line on Barroso case

In a letter to a coalition of transparency NGOs, the EU executive has repeated that a meeting between its former boss - now working for Goldman Sachs - and the current vice president was "fully in line" with the rules.

EU rejects US trade 'gun to the head'

EU leaders demanded a permanent exemption from US tariffs on steel and aluminium - and ruled out any bilateral trade talks within the 1 May deadline set by Donald Trump.

News in Brief

  1. EU wants 'Paris' climate strategy within 13 months
  2. Workload of EU court remains high
  3. Spain's supreme court charges Catalan separatist leaders
  4. EU calls for 'permanent' exemption from US tariffs
  5. Summit backs guidelines for future EU-UK talks
  6. Macron support drops as public sector workers go on strike
  7. EU leaders condemn Turkey for illegal actions in Aegean Sea
  8. Parliament must publish 'trilogue' documents, court says

Stakeholders' Highlights

  1. EUobserverStart a Career in EU Media. Apply Now to Become Our Next Sales Associate
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?

Latest News

  1. Nordic states discuss targeted Russia sanctions
  2. Commission sticks to its line on Barroso case
  3. Germany and France promise new Russia sanctions
  4. EU rejects US trade 'gun to the head'
  5. Tariffs and Turkey will top This WEEK
  6. EU leaders roll over Brexit talks amid Trump and Russia fears
  7. Europe needs corporate tax reform - a digital tax isn't it
  8. EU data chiefs rally behind UK over Cambridge Analytica