Germany's finance minister has warned that a single EU bailout agency and rescue fund for ailing banks is legally untenable until the bloc's treaties have been overhauled.
Wolfgang Schäuble calls for a “two-step approach” that would leave bank rescues in the hands of “a network of” national authorities until treaty changes can take place. Mr Schäuble’s declaration comes just weeks before the European Commission is due to present its plan for a single bank resolution agency and rescue fund – widely touted as the second pillar in the eurozone’s much-vaunted “banking union” – throwing the proposal into doubt even before it is unveiled.
“The EU does not have coercive means to enforce decisions. Its historical roots are young. Its democratic legitimacy could be improved upon”, Mr Schäuble writes. “What it has are responsibilities and powers defined by its treaties. To take them lightly, as is sometimes suggested, is to tamper with the rule of law.”
Lawyers for the European Commission and the European Central Bank, which has joined Brussels in pushing for quick adoption of a resolution authority after last month’s creation of a common EU bank supervisor in Frankfurt, have argued that existing treaties allow for centralising powers to shut down or restructure weak banks.
But Mr Schäuble writes that the treaties “do not suffice to anchor beyond doubt a new and strong central resolution authority”. He added that promises to create an authority quickly would cost the EU credibility, saying: “We should not make promises we cannot keep". Even limited changes to EU treaties can take months if not years.
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