14 June 2013

Handelsblatt: Berlin "categorically" rejects common eurozone resolution mechanism

Translated from the German

A harsh dispute over the banking union has erupted between the Federal Government and the EU Commission. As the Handelsblatt learned from a senior government official, Berlin wants to prevent the planned Brussels EU authority for the resolution of ailing banks by any means. "We will proceed politically and if necessary legally against such an EU solution", the official said.

The European Commission is still intending to propose its plan for a resolution agency before the EU summit at the end of June. The federal government, however, considers it impossible within the scope of the existing EU treaties that the Commission should have the final say in the management of a failing bank. It is considered highly unlikely that Berlin will really take the EU Commission to court over this matter. In the Economic and Financial Affairs Council, however, the Federal Government could organise a blocking minority against the project, as Great Britain and France are also expected to reject the Brussels proposal.

In central bank circles people are becoming worried. The construction of the banking union should not be further delayed, it is said. The European Central Bank (ECB) that is to take over the supervision of the major banks, is also for a central resolution authority. According to the Handelsblatt however, the ECB does not want the task to be assigned to the Commission, but instead a new, independent EU authority or the euro rescue fund, ESM.

Full article (in German)

© Handelsblatt