The Council accordingly updated its negotiating position – the so-called "general approach" agreed in December 2013 – on the following six items: 

1. Resolution procedure: which institution would be the "ultimate resolution authority"
2. Which institution should decide whether a bank is "failing or likely to fail"
3. Role of the plenary session and the executive session of the single resolution board in an individual resolution decision
4. Voting arrangements at plenary sessions of the single resolution board
5. The possibilities for the Single Resolution Board to contract borrowings for the single resolution fund (SRF)
6. How to determine the contributions to the single resolution fund. 

"Today's discussions in the Council on all these issues have been extensive, difficult, but constructive, and we have a new updated mandate […] which allows us the necessary flexibility to go to the trilogue with the Parliament tomorrow", said Greek Minister of Finance Giannis Stournaras, who chaired the meeting, at the press conference.

Based on the updated mandate, the Presidency will continue negotiations on 12 March in a "trilogue" – negotiations between the Council, the European Parliament and the European Commission – which will take place in Strasbourg. 

Mr Stournaras and Eurogroup President Jeroen Dijsselbloem will participate in tomorrow's trilogue with the Presidency negotiating team. The Eurogroup President chairs the special meeting of ministers to whom the intergovernmental conference has been reporting on the negotiations on the intergovernmental agreement on the SRF.

Press release

Commissioner Barnier said: "Today, we made progress on a number of elements:

• The “trigger” is clarified as well as the allocation of roles between the executive and plenary sessions.

• The decision-making rules in the single resolution board have been made more efficient and an agreement has been found on the parameters for calculating bank contributions to the single resolution Fund.

However, on the issue of "who pushes the button", the Council decided not to change the balance of roles between the Council and Commission, on which it had agreed on 18 December 2013, thus rejecting one of the key demands of the European Parliament and maintaining a text on which the Commission continues to have a formal legal reserve.

On this basis, I will participate tomorrow in the trilogue as constructively as possible to bring closer together the points of view of the two co-legislators which remain very divergent, so we can reach agreement on an effective and credible mechanism before the end of April."

Statement

On 12 March, in his introductory statement on the European Council, Barnier added: "The Commission has defended its proposal with vigour. It is the Council alone which has to answer for its insistence to put some elements into an intergovernmental agreement. But we need to be realistic. So the Commission argued once again in the Council meetings this week that the intergovernmental agreement needs to be kept to the minimum. We are in favour of the acceleration of mutualisation of the fund and for it to have effective access to funding from day one. And we are with Parliament in seeking simpler governance rules, respecting the autonomy of European Union law and its decision making procedures, the institutional balance and the prerogatives of each institution to determine their own organisation."

"Yesterday in ECOFIN no progress was made as regards the respective role of the Council and the Commission, and the Commission remains deeply concerned as to the compliance of the Council's approach with the case-law of the court. Let me be clear: the Commission has been and continues to work constructively with you for an outcome that is as close as possible to our original draft, which is fully compatible with and upholds the primacy of European Union law."

Full statement

In his declaration on 10 March, Barnier had warned: "A few weeks before the end of the parliamentary term, the respective lines of each co-legislator need to move. Not one or the other, not one without the other. I repeat what I have already said, we cannot afford not to reach a final agreement by the end of this mandate." 

"As regards the financing issues, the goal is to find solutions to ensure that the fund and its total €55 billion can be mobilised at any time, meaning before the fund has been fully built up, or when it has already been partially or fully utilised. We also need to anticipate what happens when these €55 billion might not be enough. Finally we need to think again how quickly the fund is shared and how fast the national contributions will be supplied.

"In terms of governance, we still need to determine which institution should initiate the process of resolution. We found a possible compromise and we must now finalise this. Then there is the question of the role of the plenary session of the resolution council relative to its executive board, namely the criteria that determine the transition from executive to the plenary and the voting arrangements in the plenary."

Full statement (in French)

See also: Commissioner Barnier's introductory remarks on the SRM, 11.3.14

Further comments

"On the question of mutualisation there are very different positions", Reuters reports Wolfgang Schäuble saying after the meeting, referring to the extent to which countries would club together in dealing with bad lenders. While France and Spain see Banking Union as a step towards sharing bank risks with Germany and advancing towards a common cost of borrowing across the eurozone, Berlin places greater emphasis on imposing losses on the creditors of laggard banks. Schäuble emphasised the need for strict 'bail-in' rules to impose losses on bondholders and other creditors of failing banks, as happened when Cyprus was bailed out last year.

As reported by the Süddeutsche Zeitung, the plan put forward by the German government to create an EU resolution authority and resolution fund for banks is potentially unlawful. This is the result of an expert report by constitutional lawyers Christoph Herrmann and Herbert Rosenfeldt from the University of Passau, which was commissioned by the Greens parliamentary group. Accordingly the the report, the plan unlawfully limits the competences of the European Commission and the EU Parliament and also violates German basic law. 

Sven Giegold, ECON coordinator of the Greens parlimentary group commented: "The expert report shows that the federal government's position is violating European law. For what can be regulated within the EU law cannot be outsourced past the EU Parliament into inter-governmental agreements. And the bank resolution funds can be established within the scope of the European treaties. Therefore, an intergovernmental treaty as envisaged by the German Finance Ministry, which degrades the EU Parliament to a mere observer, is not acceptable." 

Press release (in German)

Expert legal report (in German)

"The countries are going to have to give us something pretty juicy on the speed of mutual use of the fund in order to get agreement", said ECON chair Sharon Bowles, setting the tone for what will be difficult negotiations. Bloomberg reports that the “updated mandate” announced by Stournaras had failed to win her over: “I think that they will find we are no pushover, and from what I hear a lot of movement is needed", she said by email. Negotiators “can probably find some” common ground today, “but not as much as council seems to want".

“We are going to have supervision at the European level, but if this is not solved then you have only the costs of possible resolution at local level", ECB Vice President Vitor Constancio said. If the SRM isn’t created, “this will undermine the correction of financial fragmentation in Europe, and that’s a very important point", he said.

See also: Graham Bishop's blog: SRM talks on verge of failure after trialogue - Final try next week

Presidency report to Council: Consideration of the European Parliament's amendments in preparation for political agreement, 10.3.14

Council general approach on the single resolution mechanism (December 2013)

Council's position on the single resolution mechanism (December 2013)

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